Let’s have fun tomorrow: Fahmi speaking to performers during the full dress rehearsal for the National Day celebration in Putrajaya. — AZHAR MAHFOF/The Star
PUTRAJAYA: There are no plans to reintroduce the Goods and Services Tax (GST) in place of removing subsidies for RON95 petrol, says government spokesperson Fahmi Fadzil.
“No, there are no discussions,” said the Communication Minister after attending the full rehearsal of the 2024 National Day celebration at Dataran Putrajaya yesterday.
He was responding to a recent report that the Cabinet was in discussion to bring back GST in lieu of removing petrol subsidies for RON95 but no decision was reached due to political sensitivity.
Citing sources familiar to the matter, the report claimed that there was a growing view within the government that GST would be politically easier, as Malaysia is an oil producer, and its people rely on its affordable prices.
GST was introduced in Malaysia in April 2015 at a flat rate of 6% for most goods and services but it was not well received.
By September 2018, GST was abolished by the then Pakatan Harapan government, which brought back the sales and service tax (SST), at a rate of 10% and 6% respectively.
On March 1 this year, the service tax rate was increased to 8% but for certain categories, like food and beverage, and telecommunications, the rate remains at 6%.
GST is a broad-based consumption tax while SST has a more limited scope and is a single-stage tax.
On Tuesday, Economy Minister Rafizi Ramli said he was not keen to reimplement GST, although a new report by the Organisation for Economic Co-operation and Development (OECD) recommended that Malaysia consider GST to increase its revenue.
“There are many ways to achieve fiscal strengthening with different groups offering varying perspectives,” he said.
As for fuel prices, diesel prices in Peninsular Malaysia were floated on June 10; it went up from RM2.15 to RM3.35 per litre.
The move was set to save the government RM4bil annually.
On Wednesday, the Finance Ministry reduced the retail price for both RON97 petrol and diesel by 5 sen, from Aug 29 until Sept 4.
RON95 petrol is still being subsidised at RM2.15 per litre. There is no confirmation from the government on when the subsidies will be removed.
