Photo: Bernama
KUALA LUMPUR: If the goods and sales tax (GST) was reimplemented, the government could have an extra RM25bil in revenue this year compared to the current sales and service tax (SST), said Datuk Seri Ahmad Maslan.
The Deputy Finance Minister said the average annual amount collected under SST was RM25bil, while GST could collect RM50bil.
“RM50bil minus RM25bil is RM25bil.
“That means under the SST, we are short of RM25bil compared to GST,” Ahmad said in Parliament during Question Time on Thursday (March 9).
Ahmad said Malaysia’s decision on the GST could determine whether the government will be able to achieve its target of reducing its fiscal deficit this year.
According to Ahmad, GST can curb the black economy, which consists of about 30% of the gross domestic product (GDP).
“The GST could reduce the black economy by about 20%,” said Ahmad.
The black economy comprises those who evade taxes or do not pay the appropriate amount of taxes.
Nevertheless, Ahmad said the government is currently implementing the e-invoicing method by the Inland Revenue Board (IRB) as one of its methods to curb the black economy.
“This initiative is where electronic invoices were introduced to SMEs, MSMEs, companies and other trade entities,” said Ahmad.
“We hope that with the use of e-invoicing, we can increase our revenue and reduce the black economy before a decision is made on GST,” added Ahmad.
Ahmad was responding to a supplementary question by Abdul Latiff Abdul Rahman (PN-Kuala Krai), who asked about the government’s measures to reduce its fiscal deficit if GST isn’t introduced.
Earlier, Ahmad, who was responding to a question by RSN Rayer (PH-Jelutong), said that 174 out of 193 countries in the world have implemented consumption taxes such as GST or VAT (value-added tax).
“More than 90% of countries in the world implemented GST or VAT and surely, they can’t be wrong,” said Ahmad.
According to Ahmad, when the GST was previously implemented, Malaysia collected taxes amounting to RM37.9bil in 2015, RM59.3bil in 2016, RM67bil in 2017, and RM36.7bil in 2018 before it was abolished that year.
“After deducting GST refunds of around RM67.8bil, GST’s net revenue was RM133.1bil in over three years,” added Ahmad.
Ahmad said GST collected a net revenue of RM27.3bil in 2015, RM41.2bil in 2016, RM44.3bil in 2017, and RM20.2bil in 2018.
Nevertheless, Ahmad said the government has no plans to implement the GST at the moment.
