Thursday, March 30, 2023

Malaysia to introduce new tax systems other than GST?

NewsMalaysia to introduce new tax systems other than GST?

The government is studying the different tax systems in the world, including whether or not to reintroduce the goods and services tax (GST) in the country, says Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz.

Nonetheless, the Finance Minister said 175 countries had introduced their own version of the GST as it contributes to the countries’ gross domestic product, and government tax revenue would be relatively low without the GST, reported Bernama.

“If the study found that the GST benefits are clear, we will take it to the cabinet. The final decision is not for the government to make, it’s for the Parliament,” he said.

Tengku Zafrul said if GST gets the green light from Parliament, it would take about 9 months for the tax to be reintroduced.

The GST of 6% was first introduced in 2015 but it was abolished in 2018 by the then ruling Pakatan Harapan government.

Meanwhile, Tengku Zafrul said the study is now at the engagement stage and the ministry is still ascertaining a fair rate, where it could be between 3% to 4% or 7% to 8%.

He added that the existing sales and service tax has been rendered inefficient and has caused many countries to introduce their own GST.

When asked about the fair rate for the GST, Tengku Zafrul said, whatever it is set at, it should be able to generate a higher revenue than the existing tax system.

He then referred to some countries that had imposed higher rate as they were able to grant many exemptions, such as in Saudi Arabia, which imposed 15% GST due to the high revenue from higher oil prices.

“There should be a study on the fair rate so as to generate revenue for the country’s development, while at the same time ensuring that it will not burden the people and the business community,” he said. 

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