THE Goods and Services Tax was one of several measures crucial in preventing the country from falling into a recession during 2014’s worldwide oil price crash, as well as contributing to the country’s economic growth.

Prime Minister Najib Razak said the GST should not be considered an additional new tax but tax reform designed to make Malaysia more competitive, to control the black and illegal economy, to reduce tax evasion and broaden the overall tax base.

“Many have falsely alleged that GST is an entirely new tax, put in place just for the purpose of bringing in more revenue for the government. In fact, it was a replacement for the sales and service taxes, which were inefficient, complicated and did not work well for either for consumers or businesses.

“If raising revenue was our only intention, it would have been easier to raise existing corporate, income and the sales and service taxes. But doing that would have been bad for local businesses, and off putting to international investors,” said Najib on his blog today, adding that the GST had been the main focus of attack by the opposition.

The leader also said the government had reduced corporate taxes from 27% to 24% while personal income tax rates went down from 28% in 2008 to 24% for majority of Malaysians ever since he began helming the Finance Ministry in 2008.

“We also raised the tax threshold so that those with incomes that are RM4,000 or below no longer have to pay any income tax, unlike in the past, where those who had salaries of even RM2,000 were taxed.

“These are all incentives for individuals and businesses to excel, as they keep a significantly higher percentage of the fruits of their labour.”

Najib said the 6% GST rate in the country was far lower than in other countries.

He also found it odd that the opposition was pushing for the GST to be abolished despite many countries acknowledging its positive benefits.

“The vast majority of countries – more than 160 around the world – have implemented GST because they know they need it to make their countries stronger and more competitive.

“Strangely, the opposition claims not to understand this. They want to abolish it but with no suggestion about how they would make up the RM41 billion in GST revenue raised last year,” he said.

Pakatan Harapan (PH) had previously promised that they would abolish GST within 100 days if they formed the government.

Meanwhile, the prime minister also said the 1Malaysia People’s Aid scheme (BR1M) was distributed to lessen the burden of low-income earners.

“We know that cost of living issues hit those on low incomes the hardest, and this is why we distributed RM5.36 billion in 1Malaysia People’s Aid, or BR1M, to 7.28 million households in 2016, and we introduced the minimum wage.

“A former leader recently described BR1M as an abuse of government funds but he should try telling that to the recipients. It is frankly cruel-hearted for anyone in the opposition to talk of taking away a programme that is designed to help ease the burden of millions.”

BR1M and GST were introduced in 2012 and 2015, respectively. – October 24, 2017.