6% GST Will Reduce To 0% In 2 Weeks

2 more weeks.

That’s all Malaysians have to hold on for until the country’s Goods and Services Tax (GST) is abolished on 1 Jun.

Malaysia’s Finance Ministry announced the policy shift in a Facebook post published on Wednesday (16 May).

The news comes just a week after Malaysia’s shocking election, which saw Dr Mahathir Mohamad made Prime Minister.

He rode into office on the back of growing unhappiness at risings costs, which many Malaysians attributed to the 6% GST.

First introduced in 2015, the tax is not applied on all goods and services.

Fresh foods, water and electricity are zero-rated, while some supplies such as education and health services are exempted.

According to media reports, former Prime Minister Najib Razak had planned to collect more than 40 billion ringgit (S$13.6 billion) from the consumption tax this year.

But the policy U-turn was initiated by Dr Mahathir, who felt that there was no need for Malaysia to collect GST revenues.

Reports suggest that the new PM has plans to return part of the collected GST to the people.

As the new policy was announced after markets closed, its impact on Malaysia and the region’s stock exchanges has yet to be seen.

Featured image from Din Merican.