KUALA LUMPUR: Malaysians may need to earn at least RM4,000 before the Government considers reintroducing the Goods and Services Tax (GST), says Datuk Seri Anwar Ibrahim.
The Prime Minister said current income levels remained too low for the broad-based tax, which could place a heavier burden on ordinary Malaysians, despite its potential to generate revenue.
“If the minimum income of our people reaches RM4,000, we can consider it because although the tax is imposed at a lower rate, it would not be considered too burdensome and we could ensure better revenue,” he said during Prime Minister’s Question Time in the Dewan Rakyat on Thursday (Nov 12).
Anwar was responding to Howard Lee (PH-Ipoh Timor) and Datuk Seri Dr Ronald Kiandee (PN-Beluran) on whether GST could generate more revenue to reduce national debt and fund development, as well as its impact on businesses and consumers.
He maintained that his administration had no intention of reintroducing GST, saying the existing Sales and Services Tax (SST) placed the tax burden primarily on businesses, while GST applied more broadly to consumers.
“GST is a tax on everyone, while SST is a tax on businesses,” he said.
Anwar said SST revenue currently stood at 3.2% of gross domestic product (GDP), equivalent to the revenue generated by GST in 2017.
He also said about 2,000 items were exempted under SST compared with approximately 750 under GST, while the latter affected about 700,000 businesses in 2018, compared with 130,000 under the current system.
Anwar said specific cases on double taxation under SST could be addressed through adjustments, adding that his position was based on concerns over the impact on the public rather than political considerations.
Separately, Anwar said Malaysia was borrowing less even as government spending continued to rise to support households and public servants.
He said RM16bil allocated for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara), RM18bil for civil service salary increases and more than RM40bil for fuel subsidies.
He said new government borrowing had declined from RM100bil in 2021 and 2022 to RM92.6bil in 2023, RM76.8bil in 2024 and RM75.6bil in 2025.
“Although our debt is decreasing, we are borrowing less, while spending is still increasing,” he said.
Anwar added that the fiscal deficit had fallen from 6.4% in 2021 to a projected 3.3% in 2027, while the Federal Government's debt-to-GDP ratio was expected to decline from 65.2% to 64% in 2026 and 63% in 2027.
He acknowledged that national debt had risen sharply between 2020 and 2022 due to the Covid-19 pandemic, but said borrowing under his administration was significantly lower and channelled towards national development.
He also said the ratio of Federal Government debt and liabilities to GDP had eased from 80.9% at the end of 2022 to 80.7% at the end of June 2026.
“Higher spending has been managed alongside efforts to prevent leakages, while tax reductions were also provided for micro, small and medium enterprises,” he said.
He added that the Government was working with government-linked investment companies (GLICs) to channel funding towards projects benefiting the country and Bumiputera businesses.
