KUALA LUMPUR, Aug 21 – The abolition of the Goods and Services Tax (GST) by the new government did not cause the country to go bankrupt but has in fact been able to survive so far, said Finance Minister Lim Guan Eng.
He said although GST was idolised by certain parties who wanted a free market and feared losing foreign investors, the impact of the tax system burdened the people, especially those in the lower income group (B40).
“Although the new government has abolished the GST, so far Malaysia has not become a bankrupt. We can still hang on, it proves that we can survive without GST,” he said when winding up the debate on the 2018 Goods and Services Tax (Repeal) Bill in the Dewan Negara today.
The bill was later approved for third reading with a majority vote before Dewan Negara president Tan Sri S. A. Vigneswaran. Lim explained that many complaints had been received since the GST was introduced and it showed that the tax system had a huge impact on the lives and cost of living of the people, especially their economic well-being.
The Dewan Negara also passed the Service Tax Bill 2018, which Lim, when winding up debate on the bill, had said that the government had exempted school canteens from the service tax. However, he said, service providers and restaurants in universities were still subject to service tax due to varied customer factors.
“If we look at the University of Malaya or other universities, these are rather large establishments where the clients are composed not only of students but also lecturers, professors and others.
“That’s why the Royal Malaysian Customs Department feels that they should be subject to service tax because they are already at the level of establishments, not like in schools,” he said.
The sitting today also approved the Customs (Amendment) Bill 2018 to amend the Customs Act 1967 and the Free Zone (Amendment) Bill 2018 to amend the Free Zones Act 1990. Vigneswaran then postponed the sitting of the Dewan which sit again on Aug 27. — Bernama