KUALA LUMPUR, Feb 28 — Minister of Economy Rafizi Ramli said today the government could reinstate the goods and services tax eventually.
Rafizi told a forum organised by a public servants alumni that rolling out the consumption tax “is a matter of timing”.
The Pandan MP once led a campaign against the Najib administration’s move to replace the sales and services with the GST. Today, he suggested to current and retired civil servants that he is not entirely against the consumption tax, and had instead opposed its premature implementation.
“The GST cannot be approached just as a means to raise government income because once it is seen as a way to raise income, it becomes addictive,” he said.
“If you don’t fix your governance, you don’t fix your spending and your effectiveness or efficiency of your budgeting, it’s very easy when you have GST — you just keep raising from initially five, then seven per cent and eventually it’ll be 20 (per cent).
“There are a series of things that we need to put in place, so that once they are the decision to implement, GST is just a question of collection effectiveness... my view about GST is when the time comes, it’s something that we have to look at but before that, we have enough avenues within the 12- to 15-month horizon to fix things which are in a hole,” the minister added.
Prime Minister Datuk Seri Anwar Ibrahim has so far ruled out any prospect of reintroducing any new broad-based consumption tax, despite the alarm sounded by some conservative economists about the government’s high debt.
The national debt has reached RM1.5 trillion or 82 per cent of the country’s gross domestic product.
The GST had been implemented under the Prime Minister Datuk Seri Najib Razak in 2015 but was met with strong public backlash that was later credited as one of the key factors that caused his fall.
It was eventually scrapped by the previous Pakatan Harapan administration in 2018 after it won elections that year but calls and suggestions to reintroduce GST have gained traction since 2022, as the government seeks to boost its income to reduce national debt and also slowly move towards a targeted subsidy system.
