No plans to reintroduce GST within next 6 months: Malaysia PM Anwar

KUALA LUMPUR: Malaysian Prime Minister Anwar Ibrahim reiterated that the government has no plans to reintroduce the Goods and Services Tax (GST) within the next six months to a year. 

Mr Anwar told parliament on Tuesday (Mar 14) that this is because the income level of Malaysians is still relatively low.

"As I have said previously, … in terms of an efficient and transparent taxation system - which is the GST - we are not ready.

"The level of income of the people is still low so I don't think that in the next six months or a year, we will consider this,” said Mr Anwar in response to a question posed by Tanjong Karang Member of Parliament (MP) Dr Zulkafperi Hanapi. 

The Tambun MP added that the threshold of people’s income must increase before GST can be implemented.

Malaysia has about 130,000 hardcore poor people and many in the B40 (bottom 40 per cent income group) category, he said. 

Dr Zulkafperi had earlier asked if the government will implement GST after the six state elections which will take place in the coming months. 

The six states, comprising Selangor, Negeri Sembilan, Penang, Kelantan, Terengganu and Kedah, are expected to hold simultaneous elections for their respective state assemblies.

CAPITAL GAINS AND LUXURY GOODS TAXES ARE SUFFICIENT: ANWAR

Mr Anwar, who is also the finance minister, said that the proposed taxes on capital gains and on luxury goods, as well as efforts to earn more income and implement strict measures against tax evasion, are a sufficient alternative to reintroducing GST.

He also said that the country must not allow the rich to get away with not paying their taxes. 

"It's usually the rich tycoons that evade tax and are protected. This is not a new issue.  

“I have said that we should not compromise on ensuring that the rich pay their taxes," he said.

He added that he has ordered investigations into such cases, including those mentioned in the Pandora Papers. 

The Pandora Papers are a trove of 11.9 million leaked financial documents naming heads of state, billionaires and celebrities who use offshore companies to acquire mansions, private jets and stakes in companies, with little or no transparency. 

The Sales and Services Tax (SST) was introduced in 2018 as a replacement to the GST. 

Then-finance minister Lim Guan Eng had said that the SST would help reduce the cost of living as compared to the GST which was charged at various levels.

Under the current SST regime, which has a narrow tax base, there is a tax of between 5 per cent and 10 per cent on the sale of goods, while services attract a 6 per cent levy.

In comparison, the former GST regime covered a broader range of items and services with the rate set at 6 per cent. GST was introduced in April 2015 by former prime minister Najib Razak.