Malay commerce group moots GST again, but at 2pc, to boost Treasury and channel cash aid for financially-hit Malaysians

KUALA LUMPUR, Sept 9 — The Malay Chamber of Commerce Malaysia (MCCM) wants the government to reintroduce the Goods and Services Tax (GST) that had been scrapped in 2018.

Its president Norsyahrin Hamidon said doing so would increase the government’s revenue, which would then enable it to give out more direct financial aid to Malaysians struggling with living costs, The Star reported today.

“Unregulated ‘shadow economy’ activities are not only harming the country and the people, but also contributing to the increase in corporate and commercial crime, as well as the country’s failure to fight corruption.

“We proposed firstly for the GST to be reintroduced at a 2 per cent rate.

“Secondly, a big portion of the GST revenue should be returned to the people in the form of monthly cash aid.

“And thirdly, we proposed for the corporate tax for micro, small and medium enterprises to be lowered from 15 per cent to 10 per cent,” he was quoted as telling a news conference at its office here yesterday.

Norsyahrin said the GST is recognised worldwide as the most efficient form to increase government revenue.

He added that without the consumption tax, Malaysia is losing out on some RM500 billion income, which he estimates to be equivalent to 30 per cent of the country’s gross domestic product.

He said the MCCM hopes the government would include its proposals for Budget 2024 that is to be tabled in Parliament next month.

“We understand that some people might not welcome the idea of having the GST back, but the reason they have this perception is because they don’t understand the essence of GST and why developed countries adopted it.

“The irresponsible shadow economy is unfair to registered business owners who always adhere to their responsibilities by paying taxes,” he was quoted as saying.

The shadow economy refers to work, business or trade that is undeclared which includes informal sectors as well as criminal activities.

Norsyahrin also said that while the MCCM understands the government’s struggle in paying off federal debts, especially due to the two-year lockdown caused by the Covid-19 pandemic, Putrajaya must also understand the plight of the business community.

He said the business community has been hit hard due to the declining consumer purchasing power from low salaries even as the cost of goods rise.

“With the expected deficit rate exceeding 6 per cent this year, we demand that the government continue to prioritise the welfare of the people by providing fiscal allocations that are more in line with their needs.

“For example, this can be done by setting a target of 5 per cent of GDP for health expenditure in addition to optimising public and private healthcare services which are now at a critical level,” he was quoted as saying.

The GST was introduced in April 2015 by the prime minister Datuk Seri Najib Razak at a rate of 6 per cent, but met a firestorm of protests from the public after prices of goods and services spiked.

It was abolished by the Pakatan Harapan government under the leadership of Tun Dr Mahathir Mohamad three years later, which brought back the Sales and Services Tax that imposes a charge of between 5 per cent and 10 per cent on the sale of goods, and 6 per cent on services.


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