Recently, the government has no plans to revive the Goods and Services Tax (GST) this year and next year because the focus is still on targeted subsidies first, said Deputy Finance Minister I, Datuk Seri Ahmad Maslan.
He also said that the government will continue to implement taxes based on the things announced in Budget 2024. Indirectly, the increase in Sales and Service Tax (SST) by 6% will contribute to the government's income to some extent.
He said further, the implementation of targeted subsidies will start with diesel first and then RON 95. The targeted subsidy initiative will delay the proposed re-implementation of GST.
His comments came shortly after answering Senator Datuk Sivaraj Chandran's question about the GST implementation plan and suggested that GST be returned but at a lower rate than the previous six percent.
Ahmad Maslan himself is not sure to know when GST will be implemented in Malaysia even though 90 percent of countries around the world have implemented it. Malaysia is the only country that withdrew the implementation of GST due to political reasons.
The advantage of GST is that it can reduce the shadow economy. Before it was implemented, 30% of the Gross Domestic Product (GDP) was the black or shadow economy. Since it was implemented in 2015 to 2018, the action caused the country to reap profits and the shadow economy remained at 20% during that time.
GST is a progressive tax where the more we spend, the more money we have and the more tax we have to pay. In contrast to targeted subsidies where the B40 group will benefit more than the rich.
