Malaysia Will Not Reintroduce GST, May Consider Targeted Subsidies
As Singapore braced itself for Budget 2023, Malaysian Prime Minister (PM) Anwar Ibrahim announced today (14 Feb) that Malaysia will not reintroduce a goods and service tax (GST) or consumption tax.
Instead, the government will consider reducing subsidies for the wealthy.
This comes after he ordered a review of Malaysia’s subsidy programme when he assumed office in November 2022.
Part of his review includes prioritising aid for low-income groups amidst the high government debt levels and increasing living costs.
Malaysia has no plans to reintroduce GST or consumption tax
On Tuesday (14 Feb), PM Anwar announced that the country does not plan to reintroduce GST or broad-based consumption tax.
Source: Anwar Ibrahim on Facebook
Instead, they are looking towards reducing subsidies for the wealthy.
Reuters reports that Malaysia offers subsidies to all citizens, with transport fuel and cooking oil making up the biggest expense.
Besides that, the Malaysian government also subsidises expenses on electricity, sugar, and flour.
The state provides these subsidies to all citizens regardless of their income bracket.
Currently, government debt and liabilities amount to RM1.5 trillion (S$459 billion). This is about 82% of the country’s gross domestic product (GDP), said PM Anwar.
“We need to find ways to increase revenue and conduct a public expenditure review without burdening the people,” he added.
Previously revealed that Malaysia was S$459 billion in debt
Earlier this year, PM Anwar revealed that Malaysia was S$459 billion in debt.
M’sia Has S$459 Billion In Debt, Anwar Says Immediate Action Required
He also stressed that authorities needed to take immediate action to address the issue.
Meanwhile, he is expected to deliver a revised government budget next Friday (24 Feb).
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Featured image adapted from Anwar Ibrahim on Facebook.
