Impractical to revive GST now, says Amir Hamzah
PETALING JAYA : Finance Minister II Amir Hamzah Azizan says the government has ruled out reintroducing the goods and services tax (GST) for now, calling it 'impracticable' under current economic conditions.
He said established and new businesses have 'moved on' to alternative tax structures since the GST was zero-rated in 2018.
As a result, a full reinstatement of the GST would likely take at least two years, he added.
Speaking as a guest on the Keluar Sekejap podcast, Amir said the government has never disputed the merits of the GST system.
However, he said Putrajaya was of the view that it cannot be reintroduced as it 'not suitable for now'.
'The GST is broad-based. It will affect everyone,' he said.
'Companies like the GST because of the input-output tax mechanism: what they charge, they can claim back. But, in the end, the burden falls on the people.'
Amir said the government was of the view that tax reform must be pragmatic and compatible with Malaysia's current economic structure.
'When we impose a tax, we need to ask: is the revenue we get worth the effort?' he added.
Podcast co-host Khairy Jamaluddin said Amir's explanation was acceptable, noting that the minister was not making the case that the sales and service tax (SST) was inherently better that the GST regime.
Last month, Prime Minister Anwar Ibrahim said Putrajaya would consider bringing back the tax scheme when the economy improves and the minimum wage reaches RM4,000 or more.
For now, the government has expanded the SST to cover more items, with a 5% to 10% tax on non-essential goods and added service tax on rent, construction, financial services, and private healthcare and education.
On the distribution of government aid, Amir drew comparisons between the unity government's Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) aid schemes and the 1Malaysia People's Aid or BR1M during Najib Razak's time.
He said BR1M had reached RM1,200 at most, while the maximum amount of cash aid a household can receive under STR and SARA is RM4,600.
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