KUALA LUMPUR: The call to reintroduce the Goods and Services Tax (GST) is again being made by MCA president Datuk Seri Dr Wee Ka Siong.
He said it was backed by various chambers of commerce in the country.
“We cannot delay the taxation system that will benefit us in the long run. We have the same opinion as other chambers of commerce that we should bring back the GST,” he told reporters.
Dr Wee said the reintroduction of GST could be done along with several improvements such as the introduction of an exemption list, zero-rated supply and giving financial aid to the poor with increased government revenue.
“In the past, it was said that the 6% rate was too high. But bear in mind, it can always be reduced to 4% and increased gradually after a certain period of time.
“Also, have proper planning so that industry people can be better prepared,” he said after chairing the Institute of Strategic Analysis and Policy Research (Insap) 2024 National Budget Roundtable Discussion at Wisma MCA yesterday.
Dr Wee also said the refund mechanism of the proposed GST should be improved as there were complaints of delays when it was implemented under the previous Barisan Nasional government.
“Refunds are very important so that the cash flow of businesses will not be affected,” he said.
He also acknowledged previous criticisms by Pakatan Harapan leaders against GST, but said that it was time for everyone to move on from that episode.
“If you don’t like the name GST, then change it to any name you want. To me, this is a better way,” said Dr Wee.
The Ayer Hitam MP also said that under the present Sales and Services Tax (SST) system, many businesses were dodging taxes, resulting in reduced revenue for the government.
“For the GST, there is nowhere you can run,” said Dr Wee.
“Throughout the world, 174 nations have already implemented the GST. So, we have to make a bold decision and forget about the past and move on.”
Dr Wee said GST should be reintroduced next year along with the implementation of the electronic invoicing system (e-invoicing).
Earlier this year, Prime Minister Datuk Seri Anwar Ibrahim said there were no plans to reintroduce GST in the near future as the income level of Malaysians was still relatively low.
On Insap’s roundtable discussion, Dr Wee said it was fruitful as various inputs and concerns on national issues were identified.
He said the government should impose a moratorium on Overnight Policy Rate (OPR) hikes as the B40 group was burdened by the increase in the price of imported white rice.
The 36% increase in rice price, said Dr Wee, would cause a domino effect as prices of goods were set to increase.
“Your disposable income will be lesser and this will impact traders and the business community.
“So we have to be very careful because in Q2 this year, the economy grew by 2.9% and exports declined 13.1%,” Dr Wee added.
The outcome of the roundtable discussion would be compiled and handed to Anwar, who is also the Finance Minister, in the coming days, he said.
“MCA and Insap will make representation to the Finance Minister to have these recommendations be taken into consideration and included in Budget 2024,” Dr Wee added.
It will be tabled on Oct 13.