PUTRAJAYA, Oct 4 2019 : Calls to reinstate the Goods and Services (GST) tax will only be considered if there is incontrovertible evidence to show that it is the will of the rakyat, said Finance Minister Lim Guan Eng.
Pakatan Harapan (PH) according to him, won the 14th General Election because the rakyat had made their choice in rejecting GST and the government must respect the mandate given by the people in regards to the tax.
“We stood on the last election on the mandate of no GST and we have delivered on that promise in abolishing it.
“So if the people want to revive the GST, like (Prime Minister) Tun Dr Mahathir Mohamad said, we will consider it. But there is a need for a clear mandate from the people,” he told reporters after attending the Finance Ministry monthly gathering here today.
Dr Mahathir reportedly said that the government would consider in bringing back the GST, but need to conduct a study first to see whether the tax introduced four years ago was more effective than the Sales and Services Tax (SST).
The GST was introduced in April 2015 at six per cent before it was abolished and replaced with the SST on Sept 1, 2018, several months after the PH wrested power from Barisan Nasional (BN) in the last general election.
Asked whether the government would bring back the GST after getting incontrovertible evidence from the people, Lim said the decision must be jointly made by the PH Presidential Council.
“Not me alone to decide. Until that is made, we have to respect the mandate and will of the people when they voted for PH, which one of our promises was to abolish GST,” he said, adding that he has not received any instructions from Dr Mahathir, who is also PH chairman, in relation to the GST.
Lim said abolishing GST had its impact in managing inflation and cost of living with Malaysia enjoying one of the lowest inflation rate in the world at 1.5 per cent.
“If we allow the six per cent GST to come back, then you will see inflation going up,” he said.
Asked if SST was still the best mechanism, Lim said, more importantly, PH had delivered its promise in accordance with the election’s manifesto to abolish GST.
“We delivered (the promise to abolish GST) and the benefit has shown that it (managed to) contain inflation and the costs of living are not so pressing as before. Sometimes our measures need time to kick in,” he added.
On the shortfall of GST, Lim said it was used to pay back the refund which was held back by the previous government.
“Once that is settled, we still manage to keep within our finances that is the balance between increasing the government revenue or lower inflation cost,” he said.
On how the government planned to increase its revenue, Lim said the RM44 billion obtained through GST was the gross collection and that amount included the refund which was never paid back.
He said the net figure for GST collection was around RM33 to RM34 billion. – Bernama