Finance Minister II, Datuk Seri Amir Hamzah Azizan said now it is not appropriate to reinstate the goods and services tax (GST) because the low-income groups are struggling with the cost of living.
The government takes a progressive approach to fiscal reform by focusing on subsidies and targeted taxation.
He also said that the government has not planned to implement GST because it is a broad-based consumption tax.
The government will continue to prioritize improving the existing taxation system and introducing taxes that do not affect the vulnerable before they assess the need to introduce new consumption taxes such as GST.
Any changes to the consumption-based taxation system such as GST must be reviewed so that the tax is more progressive, easy to administer, does not harm the cost of living, economic growth and generates sustainable revenue for the government.
GST was implemented in Malaysia on 1 April 2015, at a rate of 6%. The tax was suspended on 1 June 2018 and was finally abolished and replaced by the sales and service tax (SST) on 1 Sept 2018 by the Pakatan Harapan government.
Currently, SST is at 6% with the rate for selected services increasing to 8% from March 1 this year.
