Anwar rejects GST calls, says tax would burden all Malaysians, including low-income earners

KUALA LUMPUR, Nov 12 — Prime Minister Datuk Seri Anwar Ibrahim dismissed calls to reintroduce the Goods and Services Tax (GST), arguing that such a step would place an undue tax burden on all Malaysians, particularly low-income earners, according to the available wire material.

He contended that the Madani government retained the Sales and Services Tax (SST) as the nation's tax system because GST was a more comprehensive tax affecting not just businesses but also low-income earners, while SST was primarily focused on the business sector. Anwar explained that although a small portion of SST was passed on to consumers, GST was more extensive.

The Prime Minister, who is also the Finance Minister, highlighted that approximately 2,000 goods and services were exempt from SST, compared to fewer than 750 under GST. Anwar disputed claims that reinstating GST would lead to increased government revenue, noting that SST currently contributed 3.2% to the Gross Domestic Product (GDP), the same proportion as GST revenue in 2017.

He emphasized that SST would remain the country's tax framework, subject to adjustments to address any instances of double taxation and improve the existing system. Anwar stated that the government remained open to amendments to SST but was not rigid in its economic principles.

Additionally, Anwar suggested that a review of GST should only be contemplated when the minimum income of the people reached at least RM4,000, ensuring that the broad-based tax would not unduly burden lower-income groups. He argued that the high cost of living continues to be a burden on the populace, and until incomes rose to a reasonable level, reintroducing GST would not be appropriate.