22 June 2024, Saturday | 10:20am

No plan to reintroduce GST

2020-12-07

KUALA LUMPUR: Putrajaya has reiterated its previous decision that the now-abolished goods and services tax (GST) will not be reintroduced as a means of supporting the government's coffers.

Deputy Finance Minister II Mohd Shahar Abdullah said, following the Covid-19 pandemic, the government had decided to prioritise the people's healthcare as well as to ensure economic recovery and resilience.

"Reintroducing the GST is not among the latest options as we are looking at all options available," he said in response to Mohamad Sabu (PH-Kota Raja) in the Dewan Rakyat.

In his question, Mohamad had asked if the ministry would be reintroducing the GST in light of the government's efforts to increase revenue amidst the current economic climate.

Shahar said the government is also focusing on improving governance and has set up a multi-agency task force to better manage finances.

"The Finance Minister (Tengku Datuk Seri Zafrul Abdul Aziz) is also committed to moving forward and is drafting a framework on how to increase government revenue which includes improving governance by introducing a Fiscal Responsibility Act," he said.

The 6 per cent GST was first implemented on April 1, 2015, by the then Barisan Nasional government but was abolished by Pakatan Harapan (PH) in 2018 when it took over.

The PH administration then reintroduced the Sales and Service Tax (SST) on Sept 1 of the same year.

On credit rating agency Fitch Rating's recent downgrade of Malaysia's sovereign rating from A- to BBB+, Shahar gave his assurances that this was not a crisis because the downgrade was not due to internal factors or economic fundamentals.

According to him, the rating did not take into account recent improvements in the nation's economic performance and the country's ranking as one of the most competitive in the region for doing business.

In response to Mohamad's question on the nation's statutory debt, Shahar said current debt stands at 56.6 per cent of gross domestic product (GDP), which is still below the 60 per cent statutory threshold.

The former threshold was 55 per cent of GDP, but was revised and increased to 60 per cent following the passing of the Temporary Measures For Government Financing (Coronavirus Disease 2019) Bill 2020 in August.

He said total government debts and liabilities were RM1.257 trillion as of September this year, with the government committed to repaying the loans on schedule.

Source: New Straits Times

 

No votes yet