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GST Might Make A Comeback To Increase Country’s Revenue

GST Might Make A Comeback To Increase Country’s Revenue

First introduced in 2015, it was repealed in 2018.

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There’s a possibility that the Goods and Services Tax (GST) will be making a comeback as it’s reported that the Finance Ministry is looking to broaden the country’s revenue base as well as re-evaluating the tax incentive package to strengthen it and make it more targeted and strategic.

Berita Harian quoted its Deputy Secretary-General, Zakiah Jaafar who said that the ministry would undertake some major fiscal reforms to strengthen the country’s revenue capacity in the event of a pandemic and crisis.

Right now, we are a little distracted to maintain a countercyclical stance until the recovery takes place in full despite limited fiscal space. We are reviewing new tax reforms, including reviewing the existing tax structure and the possibility of new taxes being imposed.

Finance Ministry Deputy Secretary-General, Zakiah Jaafar via Berita Harian

Back to 2015?

GST was first introduced in 2015, when Datuk Seri Najib Abdul Razak was the Prime Minister, with a rate of 6% which replaced the Sales and Services Tax (SST), based on reports from The Star.

It was said that the tax would be able to resolve weaknesses in the current taxation system such as the impact of double taxation, absence of full tax relief on exported goods and issues over transfer pricing.

It was later abolished after he was succeeded by Former Prime Minister Tun Dr Mahathir Mohamad who reinstated the SST.

At the time, according to reports from The Sun the reason given by the Pakatan Harapan government was that the tax had caused the cost of living in Malaysia to rise.

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