SINGAPORE, July 8 (Bernama) -- Malaysia will be able to better manage its finances with the implementation of goods and services tax (GST), says Matthew Circosta, economist, Moody's Analytics.
Circosta said Singapore, New Zealand and Australia had successfully implemented the GST, while Japan planned to increase its consumption tax to help lower the government debt burden.
"Currently, the (Malaysian) government draws most of its revenue from taxes on corporate incomes and petroleum, both of which are highly cyclical and dependent on commodity prices.
"The GST would help produce a sustainable source of revenue for the government and rein in the budget deficit and overall public debt level," he told Bernama here Monday.
Singapore implemented the GST at three per cent and gradually increased it to the current rate of seven per cent.
On the best percentage for Malaysia to start with, Circosta said: "It is difficult to say, but it would most likely be around that mark."
He said in 2009, the Malaysian government planned to introduce a four per cent GST in mid-2011.
"Japan has a five per cent GST and plans to increase it to eight per cent in 2014 and 10 per cent in 2015," he said.
-- BERNAMA
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