KUALA LUMPUR: Malaysians are not ready to take on the burden of the Goods and Services Tax (GST) yet, says Deputy Finance Minister Steven Sim.
He said GST could cripple the household financial stability of younger families, which is why the tax would not be implemented anytime soon.
“Those affected the most will be single-parent families, female-headed households and young parents. Many of them are still recovering financially from multiple crises, (so) this is not the right time to do GST,” he said.
Sim said the lower income group would pay more tax as a ratio of their income compared with the higher income group, according to a 2015 study by the Penang Institute.
He said greater fiscal discipline and a focus on ensuring the growth of businesses would be the government’s fiscal strategy going forward.
“The first priority is ensuring there is sustainable growth momentum in our economy, whether it is more investments or opportunities for foreign and local businesses.
“Once businesses are making money, then we will focus on implementing more efficient and progressive taxation so that the benefits can be shared among the people.
“Lastly, once the country’s revenue has increased, we will focus on greater fiscal discipline to ensure taxpayer money is spent more prudently and transparently to prevent any corruption, leakages or wastage,” he added.
Sim said Malaysia’s economic growth hit 5.6% in the first quarter of 2023 and it surpassed a few of its regional neighbours.
“We surpassed the economic growth of Indonesia (5%), Vietnam (3.2%), China (4.5%) and Singapore (0.1%),” he said in his speech at the National Economic Forum 2023 in Kuala Lumpur Convention Centre yesterday.
On the demand side, Sim said growth was driven by private sector expenditure following continued improvement in the labour market as well as public investment in various infrastructure projects.
On the supply side, there was commendable expansion, with the services and manufacturing sectors recording 7.3% and 3.2% growth, respectively, he added.
Sim said this meant Malaysia’s economy had recovered to pre-crisis levels when seasonally adjusted.
