REINTRODUCING the Goods and Services Tax (GST) will cause a sharp rise in the prices of goods and services at a time when the public is already struggling with the high cost of living, the Pakatan Harapan Presidential Council said.

In a statement, the council said it disagreed with Prime Minister Ismail Sabri Yaakob’s proposal to bring back the controversial consumption tax, at a time when inflation is on the uptick and the public was  recovering from the Covid-19 pandemic.

“In a situation of rising inflation, the people are very much affected by the rising cost of living as well as the depletion of household income as a result of the Covid-19 pandemic,”

“The reintroduction of GST will result in the price of goods rising sharply. If coupled with supply chain problems as well as stagnant wages, the people will be under tremendous pressure,” it said in the statement.

The statement was signed by PKR president and opposition leader Anwar Ibrahim, DAP secretary-general Anthony Loke Siew Fook, Amanah president Mohamad Sabu and Upko president Madius Tangau.

Yesterday, Ismail Sabri told Nikkei in an interview, that his government was considering bringing back the GST.  

The GST was implemented by the Barisan Nasional government in 2015, but it was repealed three years later by the administration of then-Prime Minister Dr Mahathir Mohamad after voters slammed the 6% consumption tax for rising costs.

Ismail Sabri said the government is aware of the GST’s unpopularity but is constrained in its options, noting that after the tax was repealed, the government lost RM20 billion in annual revenue.

He told Nikkei that the government would aim for a GST rate that isn’t too high and doesn’t “undermine the purpose of increasing tax collection.”

The council said considering the fact Malaysia is ranked 62nd in the Corruption Perception Index and second in the crony-capitalism index, it is incomprehensible that the government should suggest collecting higher tax amounts from the people before even proving that it is capable of good and clean governance.

“No point collecting more taxes if the people’s money is going to be wasted on corruption, cronyism, and leakages,

“The Prime Minister should also be reminded that the majority of Malaysians have rejected GST in the last election,” it said. – June 1, 2022.