No GST hike, Najib promises

Bede Hong Bede Hong Updated 8 years ago · Published on 24 Jan 2018 5:22PM · 3 Comments

Prime Minister Najib Razak says the goods and services tax will not be increased even though Malaysia's rate at 6% is among the lowest in the world. – The Malaysian Insight pic by Seth Akmal, January 24, 2018.

PRIME Minister Najib Razak made a pledge today that there will be no hike in the goods and services tax (GST).

Speaking at the 36th World Customs Day in Putrajaya today, Najib, however, pointed out that the country’s GST rate is among the lowest in the world and revenue from this contentious tax has brought “stability” to the country.

“For your information, our GST rate is among the lowest worldwide. Here I would like to announce that there is no proposal for the GST rate to be increased,” the prime minister said.

Najib also announced that RM58.8 billion in revenue was collected by the Customs Department for 2017, of which at least RM44 billion was from GST alone.

The Customs Department also seized RM1 billion from anti-smuggling operations last year.

Also present at today’s event were Customs director-general Subromaniam Tholasy, Finance Minister II Johari Abdul Ghani and chief secretary to the government Ali Hamsa.

He defended the tax which was introduced in mid-2015 at 6%, to cover a shortfall in government revenue, adding that it was because of this tax Putrajaya was able to make a special payments to civil servants earlier this month.

“It was through the GST that we have RM1.6 billion to distribute for the special payment. It was because of this policy that allowed sufficient revenue,” he said, adding that the GST helps fund programmes for the benefit of Malaysians.

“The policy gave us stability. Even during the collapse in oil prices and a global recession, we have sufficient revenue.”

He said that Moody’s Rating Agency gave the country an ‘A’ credit rating recently as it is “stable”, and this was because of the introduction of the GST.

“If there was no GST, special payments would not be possible. Who knows, we may even enter recession,” Najib said, adding that the lower income households, known as B40, also saw higher redistribution of income.

“It shows that the decision we made (to introduce the GST) was the best decision, as other countries have followed suit, including Saudi Arabia recently (which introduced a value-added tax).” – January 24, 2018.

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Comments

  • OPPOSITION UNDER TDM AFFIRMS THAT THEY WILL REMOVE GST COMPLETELY. IN FACT TDM WAS A FINANCE MINISTER WHEN NAJIB WAS IN HIS CABINET. I SUPPOSE TDM IS MORE RELIABLE. PUBLIC WANTS CORRUPTION TO BE MINIMISED.

    Posted 8 years ago by Mohanarajan murugeson · Reply

  • No GST hike until when? Fact is it will be raised in less than 10 years, likely much sooner given govt spending grows faster than revenue.

    Posted 8 years ago by Bigjoe Lam · Reply

  • Maybe the PM is not getting the message. The public is not concerned with GST hike. it's simply that even the current GST rate is affecting a lot of people. It is true that GST is more spread out, and is fairer to everyone who consumes - it depends on what you consume and how much. But perhaps there is a good argument to be had that because we are not really as developed yet, ordinary folks and small businesses are really facing enormous pressure with inflation. This reminds me of the debate in the US whether rich people ought to pay more taxes. Folks like Warren Buffet didn't mind, seeing it as a civic duty. Perhaps we need to do that until our economy shifts gear and things become more affordable. As it is, Malaysians' consumption power has been diminishing. So what if we are higher income nation? As long as inflation outstrips us, that label is meaningless.

    Posted 8 years ago by Quigon Bond · Reply