No decision yet on reintroducing GST, says Ismail Sabri

KUALA LUMPUR: The government is still studying whether to reintroduce the goods and services tax (GST) and has not made a decision yet, says Datuk Seri Ismail Sabri Yaakob.

The Prime Minister stressed that he had not announced that the government would reinstate GST soon but merely said it was looking into this possibility.

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"Many people started jumping when I said the government was ‘not ruling out the possibility’ (of reintroducing GST), but I also said we needed to study the negative and positive aspects of it first.

"I did not announce the reintroduction of GST; I just said we will look into it as studies have shown that there is a shortfall of RM30bil in revenue yearly after we moved from GST to SST (sales and service tax),” he told reporters after launching the World Environment Day celebration at Taman Tugu here Sunday (June 5).

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The prime minister said it was important for the people to be properly informed of any new taxation system that the government plans to introduce.

"If we feel SST is no longer suitable, what we are going to replace it with? The people need to understand first. We want our announcement to be accepted and not rejected by the people.

"We have many more considerations to make. Would the effects of GST lead to higher prices? Is the time suitable now or in a few years’ time? Don’t worry; when the time comes we will make an announcement,” he said.

GST was first introduced in Malaysia on April 1, 2015 at 6% by the Barisan Nasional government.

GST was suspended on June 1, 2018 and finally abolished and replaced by SST on Sept 1, 2018 by the then Pakatan Harapan government.

The current rate for sales tax is 5% and 10% while service tax is at 6%.

In a special interview with Nikkei Asia in Tokyo recently, Ismail Sabri said GST was seen as capable of widening the country’s revenue base, and the government was not ruling out the possibility of reinstating it as an effective way to increase national income and help combat inflation and rising cost of living. - Bernama