The potential reintroduction of the Goods and Services Tax (GST) has stirred debate in Malaysia as the country works toward economic recovery. Although the GST is recognized as a reliable source of government revenue, Prime Minister Datuk Seri Anwar Ibrahim has made it clear that the country isn't ready to bring it back just yet.

Addressing the 78th Annual General Meeting (AGM) of the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCIM), Anwar stressed the need to strengthen the economy before reconsidering GST. He pointed out that the country's minimum income must be raised to ensure fairness in tax distribution.

"We need to raise the minimum income level to RM3,000 or RM4,000 before we can fairly implement GST," Anwar said, as reported by Berita Harian. "If we introduce GST now, it will impact both the rich and the poor equally, and I cannot accept that."

Currently, Malaysia's minimum wage is RM1,500 per month. Anwar believes that increasing wages is necessary to avoid burdening the lower-income population, who would struggle with the additional tax, especially given the rising cost of living.

Although GST is regarded as one of the most efficient tax systems, Anwar emphasized that the timing isn't right. He argued that Malaysia needs time to improve economic conditions, particularly for those with lower incomes, before a fair tax system like GST can be implemented.

For the time being, it seems unlikely that GST will be reinstated in the near future. Analysts predict that the upcoming 2025 Budget, which will soon be presented, will not introduce new taxes. Additionally, reintroducing GST would require passing new legislation, which could take time.

Anwar's views on GST are informed by his experience during his previous tenure as Finance Minister in the 1990s. At that time, GST was a matter of debate, but Anwar opposed its introduction, arguing that corruption, which had cost the country billions, needed to be addressed first.

As Malaysia focuses on its economic recovery, the discussion around GST will continue. However, for now, Prime Minister Anwar Ibrahim has made it clear that the priority is to raise income levels and strengthen the economy before considering a tax system that would impact all Malaysians, regardless of their financial situation.

Source: Berita Harian