Just last month, Malaysia Prime Minister (PM) Anwar Ibrahim announced that the government has no plans to reintroduce the Goods and Services Tax (GST).
In a recent Parliament sitting, PM Anwar said once more that the Malaysian government will not reintroduce GST.
Source: Anwar Ibrahim on Facebook
He explained that the country is not ready for a broad-based consumption tax due to citizens’ low household income levels.
Instead, PM Anwar asserted that the current Capital Gains Tax and Luxury Goods Tax are suitable alternatives.
On Tuesday (14 Mar), PM Anwar Ibrahim told parliament that the Malaysian government will not reintroduce GST just yet.
Channel News Asia (CNA) reported that PM Anwar had been asked about GST by Tanjong Karang Member of Parliament (MP) Dr Zulkafperi Hanapi.
The latter had previously asked if the government will reintroduce the taxation system after the coming six state elections.
Responding to the question, PM Anwar noted that Malaysians’ household incomes must increase before they reintroduce GST.
“The level of income of the people is still low,” he said. “I don’t think that in the next six months or a year, we will consider this.”
According to PM Anwar, Malaysia has over 130,000 citizens in the hardcore poor and B40 (bottom 40 per cent income group) categories.
Due to the low income levels in the country, PM Anwar argued that Malaysia is not yet ready for GST.
Based on a report by New Straits Times (NST), the Malaysian PM cited Singapore, Canada, and New Zealand as examples.
Source: Anwar Ibrahim on Facebook
He said that compared to these countries, Malaysia still has a long way to go before meeting the minimum income.
Instead of reintroducing GST, PM Anwar posited that the recently introduced Capital Gains Tax and Luxury Goods Tax will suffice.
The two taxes are “more than enough for the country to gain extra income”, he noted.
Additionally, NST reported that the abovementioned taxes will also help to get rid of tax evasion.
The Star quotes, “It’s the rich towkays (tycoons) that often evade tax… There should not be any compromise on this in ensuring that the rich pay their taxes”.
Previously, PM Anwar mentioned that the government is looking to reduce subsidies for Malaysia’s wealthy.
He has also asked authorities to investigate potential tax evaders belonging to the country’s elite.
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Featured image adapted from Anwar Ibrahim on Facebook.
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