On Friday (7 October) evening, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz unveiled the National Budget 2023 at the Dewan Rakyat. The RM372.3 billion budget is the biggest in the country’s history, and it will focus on four key areas — people, business, economy and government.
Following the Finance Minister’s presentation, there had been many voices from the floor, with many raising concerns about the funding of this huge budget. Some even speculated that the government is mooting to bring back the Goods and Services Tax (GST) to fund it.
Responding to these voices, Tengku Zafrul said that the discussion on reviving the GST will only be done next year.
“We will be discussing that (GST) in Cabinet depending on the economy next year. For this year, we did not discuss it for this budget,” he said.
Meanwhile, he said that the global economy is expected to grow at a moderate pace and Malaysia would not be spared.
“We forecast that our GDP will remain positive between 2% and 3%. Malaysia also would be somewhat affected this year as we forecasted growth of between 6.5% and 7%.”
“We should be doing between 4% and 5% for next year,” Tengku Zafrul said.
More funding required
He also shared that the government’s revenue this year was contributed significantly by a major dividend payment by Petronas, which is RM50 billion. However, he is not expecting the same amount for next year and thus, the funding should come from somewhere else.
“In terms of tax cut, yes there will be some impact but the amount of money that is being fed to the economy is expected to give a multiplying impact, especially the tax cut for M40,” he added.
The GST came into effect on 1 April 2015, to replace the Sales and Services Tax (SST) but was abolished by the Pakatan Harapan administration in August 2018.
While experts agree that the GST is generally better than the sales and service tax (SST) because the GST broadens a country’s tax base and brings in more revenue, many had expressed concern about why the initial rate was set at 6%.