PETALING JAYA: Economists have stated that the goods and services tax (GST) should only be reinstated if accompanied by a clearer mechanism. Bank Muamalat Malaysia Bhd’s chief economist and social finance head, Mohd Afzanizam Abdul Rashid, said that the explanation should include the government’s plans for using the extra income, such as distributing cash aid. He believes that GST could be a useful tool for addressing the shadow economy and incentivizing businesses to register with the relevant authorities.
“The government should ensure that the implementation of GST is more seamless, particularly in areas related to Input Tax Credit and the categorization of goods and services,” he added.
MCA president Datuk Seri Dr Wee Ka Siong has also urged the government to bring back GST with improvements, including the introduction of an exemption list, zero-rated supply, and increased financial aid to the poor. Professor Dr Mohd Nazari Ismail from Universiti Malaya’s Business and Economics Faculty stated that reintroducing GST could increase government revenue, enabling spending on public services in sectors like education and health.
However, Nazari also emphasized the need for a long-term solution to address the cost of living and suggested eliminating the debt-based economic system in favor of an equity-based financial system as part of this solution.
Ding Hong Sing, the national president of SME Association, welcomed the proposed plans to reintroduce GST but called for improvements in the refunds mechanism. He stated that SMEs are not opposed to the plans to generate revenue through GST but emphasized the need for a better refund system.
On the other hand, the Penang Malaysian Trades Union Congress (MTUC) has urged the government to halt any plans to revive GST in the upcoming Budget 2024. They believe that it is only practical to reintroduce the tax for the country’s economic growth if the public is provided with better salaries.
Prof Barjoyai Bardai, an economist at Tun Abdul Razak University, suggested that the government should explore alternative taxation mechanisms. He highlighted that Malaysia’s tax ratio in relation to GST is low compared to other developed countries, indicating that there is room for more taxation. However, he cautioned against taxing the public without considering the low salary rates in Malaysia relative to inflation.
Credit: The Star : News Feed
