KUALA LUMPUR, November 23 — Deputy Finance Minister II Steven Sim has stated that the Malaysian government will only contemplate the reintroduction of taxes like the Goods and Services Tax (GST) after exploring all available options to strengthen the country’s finances. Emphasizing that taxation is not the sole method to generate additional revenue, Sim highlighted the government’s current focus on managing spending through targeted subsidies and minimizing leaks in the system. He mentioned that, instead of burdening the B40 and M40 segments with increased taxes, the government is concentrating on enhancing spending efficiency and exploring various avenues to boost revenue.
Addressing concerns about tax evasion, Sim shared plans by the Inland Revenue Board to introduce e-invoicing as a measure to minimize tax evasion and other anti-corruption initiatives, such as implementing open tenders. Sim emphasized the need to address spending management and efficiency before considering additional taxes like GST, which he believes would be a last resort. Sim expressed concerns that the reintroduction of GST would raise prices significantly, covering about 80% of services compared to the current Sales and Services Tax (SST), which only covers around 41% of services.
He concluded that now is not the right time to implement GST, as it could burden the people by covering a broader range of products and services. In 2015, former Prime Minister Datuk Seri Najib Razak introduced a six percent GST, which was later abolished by the Pakatan Harapan government in 2018, replaced by the current six percent SST system. Prime Minister Datuk Seri Anwar Ibrahim announced during the 2024 budget presentation on October 13 that the SST rate would increase to 8 percent, with exemptions for food, beverages, and telecommunications from the hike.
