KUALA LUMPUR, September 14 – Prime Minister Datuk Seri Anwar Ibrahim stated that the government should reduce subsidies for the wealthy before reintroducing the Goods and Services Tax (GST). During an interview with Haslinda Amin of Bloomberg at the 10th Milken Institute Asia Summit, Anwar acknowledged that GST is the most efficient and transparent tax system. “When should we implement it? It depends on the threshold. When people are living in extreme poverty, you need to introduce a progressive tax policy, but not a broad-based policy that affects the very poor.
“So, you need to give it some time, but does that mean you’re doing nothing at all? No. You need to expand the tax base, certainly. But you must first reduce subsidies to the wealthy,” he said. He noted that rationalizing subsidies would not be a popular decision, but the government has four years before the next election. Therefore, he said the government needs to rationalize subsidies as soon as possible because subsidy spending for the country is among the highest in Asia. Regarding investments, Anwar said Malaysia is focusing on policy clarity to attract investments, similar to what was achieved in the 1990s.
He stated that with the right policies, economic clarity, and good governance, Malaysia can perform even better than it did in the 1990s. “We have a good team, and we need to acknowledge that we need investments. There must be facilities to conduct business. There must be economic clarity. “Basically, there is a concept of Madani, but why do I call it Madani? It’s because of concern and compassion.”We need to address the issue of inequality; we have people living in remote areas including Sabah and Sarawak, and some areas in Peninsular Malaysia. We need to address this issue.
“And with clear policies, we have been able to attract major investments in the past five to six months from China, the United States (US), and Europe. The largest investment from Infineon Technologies, investing five billion euros (approximately RM24.9 billion) in Malaysia. This will greatly boost confidence,” said the Prime Minister. The government introduced the Madani Economy aimed at boosting Malaysia’s economy, the National Energy Transition Roadmap (NETR) to achieve the country’s net-zero greenhouse gas (GHG) emissions aspiration by 2050.
And the New Industrial Masterplan 2030 (NIMP 2030) targeted at revitalizing the country’s manufacturing sector and increasing its value-added contribution to RM587.5 billion by 2030. Regarding Tesla’s investment, Anwar said the leading US automotive company has decided to open its operational headquarters in Malaysia at the end of October or early November this year. Meanwhile, three local companies have collaborated with SpaceX, while the addition of Starlink could bring significant benefits to Malaysia, he said.
When asked which sectors investors should consider in Malaysia, Anwar said Malaysia is expected to see significant growth in digital transformation, energy transformation, and renewable energy. “As for investment tax, it needs to be attractive… whatever needs to be done, whatever is needed to ensure that Malaysia remains a competitive and attractive investment destination,” he said.
