PUTRAJAYA, Mar 22 – The Barisan Nasional government will stick to the goods and services tax (GST) since the tax system has proven to be efficient for Malaysia, said Second Finance Minister Datuk Seri Johari Abdul Ghani. He said GST, which had been implemented by over 170 countries, could help eliminate the huge black economy of untraceable and non-taxable business transactions.
“With GST, we expect revenue to increase as we are able to efficiently manage our tax system. GST is the most efficient system in the world. Even in some countries that have changed the government, the new government that took over never reversed the system.
“This is because the system is efficient as it will be able to reduce the huge black economy. If you do not have GST, you cannot expect the economy to grow to the next level, or to eliminate the black or shadow economy,” he told reporters after launching the Finance Ministry’s annual open day here today.
Johari was responding to a question on Pakatan Harapan Chairman Tun Mahathir Mohamad’s remark that Malaysia was able to become an Asian Tiger without GST. Since Malaysia implemented GST from April 1, 2015, with a fixed rate at 6%, more and more companies had come forward to register for inclusion in the tax system, Johari said.
“For those who say this system is not efficient, I want them to come forward to explain and justify to me. I have already debated several times in Parliament about GST being the best system,” he said. Asked on the proposal to revert to the sales and services tax (SST), Johari said, it was up to the voters to decide who had brought development to the country based on track record.
On the tabling of a Supplementary Supply Bill on Monday seeking additional budget allocation, Johari said, it was a normal contingency Bill as the government had tabled such a Bill in previous years to rectify some areas in the budget.
“In the past, there were times we tabled the supplementary budget up to four times a year. But over the past four years, we only did it once annually. This shows that we have improved the efficiency of our budget. Our budget is almost accurate and we have achieved the budget deficit target. So it is not a big issue,” he added.
According to him, the supplementary supply bill must be tabled every year to rectify certain areas involving 18 ministries. On Monday, Johari tabled the Supplementary Supply Bill (2017) 2018 for its first reading in Parliament, saying that the additional monies were needed to support additional expenditure under the federal budget.
In October 2016, Prime Minister Datuk Seri Najib Abdul Razak announced an allocation of RM260.8 billion when tabling the 2017 Budget in Dewan Rakyat. Earlier, during his speech, Johari underlined that four fundamental factors, namely political stability, strong financial system, best talents and expertise from government and private sectors, as well as a healthy society, were deeply connected with investment and pace of economic development. — Bernama