KUALA LUMPUR — June 9, 2015: The fall in oil prices could have sent Malaysia into an economic crisis had the Goods and Services Tax (GST) not been imposed, said Prime Minister Datuk Seri Najib Tun Razak today at the NajibRazak.com blog.
He goes on to say that the GST, which replaced the Sales and Services Tax (SST), has helped broaden the country’s revenue stream to avoid a high reliance on oil revenues.
The GST is a worldwide tax system which is more transparent and systematic than the SST, he said, adding that the change in the tax system was inevitable.
Najib, who is also finance minister, said yhat with the change, Malaysia now has a more diverse revenue stream and strong fundamentals.
“The business community and foreign investors remain optimistic.”
Najib further makes clear that the GST would not go into bailing out the government.
“The issue of using GST revenues to bail out failed ventures does not arise,” he said, responding to former prime minister Tun Mahathir Mohamed’s claim to this effect.
The government will disclose in the next annual budget how the revenue from the GST will be spent.
“To say that those who are not in the income tax bracket are bailing out the government is nothing short of twisting facts,” he said, revealing that the bulk of government assistance goes to this group.
“They are even compensated in the form of 1Malaysia People’s Aid (BR1M).”
The government has allocated RM13 billion from 2012 to 2015 for BR1M that benefits nearly 7.4 million people. — Bernama