PUTRAJAYA might introduce “other forms of taxes” to bolster the country’s coffers, but only after exhausting all avenues, Deputy Finance Minister Steven Sim said.

He, however, said that taxation was not the only means to raise additional revenue for the country, adding that a reintroduction of the goods and services tax (GST) would burden the people.

Sim said it was vital for the government to first manage its spending by focusing on targeted subsidies and minimising leakages.

“Instead of making the B40 and M40 pay more tax, we (the government) said let’s deal with efficiency (by asking ourselves) how we can manage our resources and spend more efficiently,” he was quoted by news portal Free Malaysia Today.

“There are still many other avenues (available to increase) government revenue. We do not start with (taxing) the people. We start with dealing with how the government is managing (its) spending.

“There’s going to be an introduction of e-invoicing (by the Inland Revenue Board) to minimise tax evasion. There are also anti-corruption measures such as (requiring) open tenders. All of these go towards increasing revenue.

“Let’s fix these things and get more money out of this, and at the same time, we adjust the tax rate to increase a bit of revenue. And once this has been exhausted, then we will consider (other taxes) and the discussion of GST will come,” the Bukit Mertajam lawmaker added.

Sim stressed that now was not the right time for the reintroduction of GST, alleging that it will only end up burdening the people, adding that the broader-based tax would cover more products and services.

A 6% GST was introduced in 2015 under then prime minister Najib Razak, but it was abolished by the former Pakatan Harapan government and replaced with the current 6% SST system in 2018.

When unveiling the 2024 budget on October 13, Prime Minister Anwar Ibrahim said the SST rate will increase to 8%, with food and beverages and telecommunications exempt from the hike.

Under the existing SST system, Putrajaya collected an estimated revenue of RM26.7 billion and RM27.9 billion in 2020 and 2021, respectively, compared to RM44 billion from the GST in 2017. – November 22, 2023