KUALA LUMPUR: There is no intention to revive the Goods and Services Tax (GST) at the moment, says the Finance Ministry.
The ministry said this, adding that Putrajaya was currently looking at some RM40bil in tax revenue from various tax regimes.
"Sales tax is expected to increase by 5.7% to RM19.4bil with the implementation of the low-value goods tax from Jan 1.
“Service tax is expected to increase by 25.8% to RM21.5bil in line with the increase of tax rate of 6% to 8% with the expansion of scope to include logistics service, brokerage and underwriting which came into effect on March 1,” the ministry said in a parliamentary written reply dated Nov 11.
The ministry said the Sales and Service Tax (SST) has been in place for 40 years and businesses and people were familiar with it.
However, it acknowledged that there was still room for improvement of the tax regime to expedite higher tax revenue generation for the government.
It added that it would take a long time to prepare the government and the industry if it were to revive the GST.
The Public Finance and the Fiscal Responsibility Act which came into effect on Jan 1 would strengthen governance and the country’s fiscal discipline.
The government said that it would continue to ensure any improvement made would not leave a regressive impact on the targeted groups.
It added that it would also ensure that inflation was under control before evaluating the need to introduce a new consumption tax like GST.
“In addition, the reintroduction of GST has to take into account (the impact on) all layers of society,” it said.
The ministry added that any changes to policy on taxation would have to be studied to ensure that the tax regime was progressive, administratively easy, does not negatively impact cost of living and spurs economic growth and revenue.
He was responding to a question by Datuk Radzi Jidin(PN-Putrajaya) on whether the government had conducted a risk analysis on GST and SST and whether the government has plans to revive the GST.
