October 29, 2013
In 2015, the govt expects to see a RM3.8 billion 'profit' from the introductions of the Goods and Services tax (GST)
KUALA LUMPUR: The government expects to earn RM23.18 billion in the first nine months of implementation of the Goods and Services Tax (GST), Finance Ministry secretary-general Mohd Irwan Serigar Abdullah said yesterday.
The GST as announced by Prime Minister Najib Tun Razak in the Budget 2014 last Friday, will be enforced on April 1, 2015.
Mohd Irwan said if the government remained with the current sales and services tax (SST), it will only receive revenue of RM14.4 billion for the same period.
The single tax GST which will replace the SST, has been pegged at 6%.
He also said the GST is likely to bring in RM32 billion in revenue for the full year of 2016.
“After the corporate tax (reduction), BR1M and refund of the sales tax under the GST, the net effect of the GST would be RM3.8 billion and RM9 billion for the government in 2015 and 2016 respectively,” he told reporters after the Post-Budget 2014 Dialogue, organised by Malaysian Economic Association yesterday.
Also present as panelists were Minister of Youth and Sports Khairy Jamaluddin, Dr Frederico Gil Sander from the World Bank East Asia and Pacific, Poverty Reduction & Economic Management, and the Petaling Jaya Member of Parliament, Tony Pua.
Asked why the government had decided on the six percent rate for the GST, Irwan said, if it had stood at four per cent as speculated earlier, the country would not have any additional revenue.
“When we calculated, … with the package (of) tax reduction, financial assistance and everything, (six per cent) is the rate palatable for the
country,” he said.
At the budget announcement, Najib had said the GST would be a fair and comprehensive tax system that would benefit all Malaysians and enable the government to address weaknesses in the current taxation system.
The GST will not be imposed on basic food items such as rice, sugar, and flour, as well as on services provided by the government.
Malaysia’s GST of 6% is also the lowest in the region.