The Malay Chamber of Commerce Malaysia (MCCM) has stated that reintroducing the goods and services tax (GST) will enhance the government’s income. MCCM President Norsyahrin Hamidon mentioned that with GST, the federal administration can utilize the additional revenue to provide assistance to those in need and invest in necessary development projects. However, MCCM proposes reintroducing the GST at a lower rate of 2% compared to the previous 6%.
Norsyahrin expressed that the absence of GST has resulted in tax leakages amounting to RM500 billion, equivalent to 30% of the country’s GDP. He emphasized that unregulated shadow economic activities not only harm the nation and its people but also contribute to the rise of corporate and commercial crimes and weaken the fight against corruption.
The proposed initiatives by MCCM include reintroducing the GST at a 2% rate, returning a significant portion of GST revenue to the people as monthly cash aid, and reducing the corporate tax for micro, small, and medium enterprises (MSMEs) from 15% to 10%. Norsyahrin shared these proposals during a media conference after a round table discussion at the MCCM office in Kuala Lumpur on September 8. MCCM hopes that the unity government will announce these initiatives in the upcoming Budget 2024, scheduled to be tabled in October this year.
Norsyahrin highlighted that GST is recognized globally as the most efficient tax system. He added that it is crucial for the government to understand the challenges faced by small businesses. The president emphasized that some individuals may oppose the reintroduction of GST due to a lack of understanding about its essence and why developed countries have adopted it. He also mentioned that the irresponsible shadow economy is unfair to law-abiding business owners who consistently fulfill their tax obligations.
Norsyahrin acknowledged the government’s struggle to repay federal debts, especially due to the two-year lockdown caused by the Covid-19 pandemic. However, he urged Putrajaya to empathize with the business community’s plight. The community has been severely impacted as consumer purchasing power declines and the cost of goods rises while daily wages and salaries remain low.
Considering the expected deficit rate exceeding 6% this year, MCCM demands that the government prioritize the welfare of the people by providing fiscal allocations that align with their needs. Norsyahrin suggested allocating 5% of GDP for health expenditure and optimizing public and private healthcare services, which are currently at a critical level.
Under the current sales and services tax (SST) regime, goods’ sales are subject to a tax ranging from 5% to 10%, and services are levied at 6%. In comparison, the previous GST regime had a broader range of taxable items and services with a 6% rate.
GST was initially introduced in April 2015 by former Prime Minister Datuk Seri Najib Razak but abolished in 2018 during the Pakatan Harapan administration led by Tun Dr Mahathir Mohamad.
Credit: The Star : News Feed
