THE government is caught in a bind when it comes to taxes as it needs to increase revenue while trying not to burden the people, said Finance Minister Lim Guan Eng.

“We are torn. We are trying to be considerate with collecting taxes,” he said at a press conference in George Town.

“We want to increase tax revenue but we don’t want to be so aggressive to a point as being taken as being oppressive and so on.”

However, he said the government would like to increase its revenue but without being aggressive and doing it in accordance with the law.

He was responding to questions on whether the country is on the right track towards achieving developed-nation status while its gross domestic product (GDP) fails to match its aspirations and lower than its regional counterparts.

Earlier, in his speech at an Inland Revenue Board event, Lim said World Bank data show that Malaysia’s real GDP value in 2017 was RM1.353 trillion, which translates to 13.1%.

“As a result, this has placed Malaysia below other countries, such as Vietnam (19%), Chile (17.4%), Poland (16.8%) and South Korea (15.4%),” he said.

He said the government will not use force against the people, unlike the previous administration, when it comes to collecting taxes.

“Previously, they use force and aggression. They come armed and wearing masks.

“We want to follow the rules and we need to find a balance between collecting more taxes and not being seen as pressing the people too much.”

He said the government wants to collect taxes according to economic growth.

“We are confident that the economy will grow robustly.”

The Pakatan Harapan government has abolished the goods and services tax (GST) and replaced it with the sales and services tax (SST).

The 6% GST was introduced by the Barisan Nasional administration on April 1, 2015 and contributed some RM44 billion to government coffers.

Meanwhile, the SST collection for 2019 amounted to RM27.5 billion, exceeding a projection of RM22 billion.

Lim said this indicates that the economy is still robust despite the tax collection for SST is lower compared to the GST.

A tax rate of 10% is imposed for sales and 6% for services under the SST. – January 13, 2020.