As Malaysia works toward economic recovery, the return of the Goods and Services Tax (GST) has been a hot topic.
While GST is recognised for being an efficient way to boost government revenue, Prime Minister Datuk Seri Anwar Ibrahim says the country isn’t ready for its reintroduction just yet.
Malaysia’s GST return: Why it’s not happening just yet
Speaking at the 78th Annual General Meeting (AGM) of the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCIM), Anwar stressed that the economy needs to be strengthened first.
The key issue, he explained, is that the minimum income level should be raised to RM3,000 or RM4,000 before GST can be fairly implemented, reported Berita Harian.
“If GST is implemented now, both the rich and the poor would have to pay, and I cannot accept that,” Anwar remarked, emphasising the need for time to improve the country’s economic conditions.
The income threshold
Currently, Malaysia’s minimum wage is RM1,500 per month. Anwar wants this raised before the country even considers bringing back GST.
Anwar further explained that although GST is one of the most efficient tax systems, its current reintroduction would place an unnecessary burden on lower-income groups, who are already struggling with rising living costs.
For now, analysts predict that the government will not introduce any new taxes in the 2025 Budget, set to be presented on Friday. The GST, which was repealed in 2018, would need a new law to be passed before it could come back, and that process would take time.
Reflecting on his earlier tenure as Finance Minister in the 1990s, Anwar noted that GST had been a topic of debate for decades.
At the time, he opposed its introduction, believing that corruption, which involved billions of ringgit, needed to be addressed first.
