MALAYSIA’S sales and services tax (SST) should continue for the time being, said Anwar Ibrahim.

“We should proceed with the SST and improve, reform and make the necessary adjustments before we begin considering change again,” the Port Dickson MP said at the Lawasia Constitutional & Rule of Law Conference in Petaling Jaya today.

While the goods and services tax (GST) was a more transparent and efficient consumption tax system, it meant everyone would be subjected to tax, said Anwar.

“Is it fair for everyone to pay when they fall under the low-income group?” said Anwar.

The PKR president was responding to a question on whether the Pakatan Harapan government should return to the GST system, which some quarters said is a more efficient taxation system.

The GST debate was reignited after Prime Minister Dr Mahathir Mohamad had said that the government could bring it back if the people wanted it.

Anwar said that while there was no doubt that the GST was a more efficient and transparent way of collecting tax, whether Malaysia was ready for it was another question.

“Particularly when many are still under a lower income bracket. Of course, there were problems of people paying double or paying a bit more during the initial change but, given the commitment by Finance Minister Lim Guan Eng to make certain adjustments, we should proceed with (the SST).”

There is, however, nothing to stop Pakatan from re-examining the taxation system to ensure the poor are not unduly burdened. 

“A better taxation system can also prevent leakages,” said the former finance minister.

“But for now, when people are earning less than RM4,000, the GST would be grossly unjust as it affects everyone,” he added.

Although exemptions can be factored in for the GST, it would nevertheless affect the poor more, said Anwar.

He said bringing back the GST could be feasible once more Malaysians begin earning more than RM4,000. 

Earlier, Anwar had admitted there may have been “some flaws” in the earlier approach on determining the poverty rate at 0.4%.

“This in contrast to other researchers, who put it at above 20%,” Anwar said in a special address at the close of the conference.

“This to my mind is unacceptable and unrealistic.” 

“Hopefully, tomorrow, the government will re-assess this issue,” said Anwar.

The government is set to unveil its Shared Prosperity policy at the Kuala Lumpur Convention Centre tomorrow. – October 4, 2019.