Country’s income: Ahmad giving his replies during Question Time in Dewan Rakyat. — Bernama
WHILE the goods and services tax (GST) will not be implemented this year, it does not mean that there is no possibility of reintroducing it, says Deputy Finance Minister Datuk Seri Ahmad Maslan.
“Putrajaya plans to implement progressive taxes such as the luxury goods tax, the capital gains tax on the disposal of unlisted shares and vape tax.
“GST can be a progressive tax in future by having zero-rated goods and services typically used by the needy.
“If GST is reintroduced, Malaysia’s taxation system will be progressive, where the wealthy will contribute more to taxes, or at the very least, we will have a proportional taxation system where each group bears the same tax rate according to their respective abilities,” Ahmad said during Question Time yesterday in response to a question by RSN Rayer (PH-Jelutong).
If GST is reintroduced, Ahmad said the government could have an extra RM25bil in revenue this year compared to the current sales and services tax (SST).
“The average annual amount collected under SST was RM25bil, while GST could deliver RM50bil.
“RM50bil minus RM25bil is RM25bil. That means under SST, we are short of RM25bil compared to GST,” he added.
According to Ahmad, GST can reduce the size of the “black economy”, which is estimated at about 30% of gross domestic product (GDP).
The black economy comprises those who evade taxes or do not pay the appropriate amount of tax.
“GST could reduce the black economy by 20% out of the 30% of GDP,” said Ahmad.
Nevertheless, the Inland Revenue Board is using e-invoicing as one of the methods to curb the black economy.
“This initiative is where electronic invoices were introduced to micro, small and medium enterprises, companies and other trades.
“We hope that with the use of e-invoicing, we can increase our revenue and reduce the black economy before a decision is made on GST,” Ahmad said in reply to a supplementary question by Abdul Latiff Abdul Rahman (PN-Kuala Krai), who asked about the government’s measures to reduce its fiscal deficit in the absence of GST.
Earlier, Ahmad revealed that 174 out of 193 countries in the world had implemented consumption taxes such as GST or value-added tax (VAT).
“More than 90% of the countries in the world implemented GST or VAT, and surely, they can’t be wrong,” he said.
According to him, when GST was implemented, Malaysia collected taxes amounting to RM37.9bil in 2015, RM59.3bil in 2016, RM67bil in 2017 and RM36.7bil in 2018, before it was abolished on June 1 that year.
“After deducting GST refunds of around RM67.8bil, GST’s nett revenue was RM133.1bil over three years,” he added.
“The nett revenue from GST for 2015, 2016, 2017 and 2018 was RM27.3bil, RM41.2bil, RM44.3bil, and RM20.2bil, respectively.”
