A political analyst has dismissed talk about the reintroduction of the goods and services tax (GST) as a non-starter.
James Chin of the University of Tasmania’s Asia Institute said he was certain that Dr Mahathir Mohamad was joking when he said the government would consider reintroducing the tax if the public wanted it.
Early this week, in recommending the return of GST with the 2020 national budget, MIER chairman Kamal Salih said the tax helped to keep the government afloat when crude oil prices declined to below US$36 per barrel in 2015.
Several economists have voiced support for the think tank’s suggestion, saying GST would be better than the sales and service tax and easier for businesses to comply with and for the government to administer.
PETALING JAYA: A political analyst has dismissed talk about the reintroduction of the goods and services tax (GST) as a non-starter.
James Chin of the University of Tasmania’s Asia Institute said he was certain that Dr Mahathir Mohamad was joking when he said the government would consider reintroducing the tax if the public wanted it.
The prime minister made the remark yesterday in response to reporters who asked for his comment on a call by the Malaysian Institute of Economic Research (MIER) for the GST to be reintroduced next year at the rate of 3%.
“There is no chance that PH (Pakatan Harapan) will reintroduce GST,” Chin told FMT.
“All this talk is just a non-starter. PH will look for other taxes, but it cannot reintroduce GST. Politically, it’s too dangerous.”
He said the tax’s reintroduction, whether with the next or a future budget, would further erode PH’s support, particularly among the Malays.
Azmi Hassan of Universiti Teknologi Malaysia disagreed, saying he didn’t believe reintroducing GST would greatly affect PH’s reputation.
“I think the GST issue is not the breaking point in public perception of PH’s integrity,” he told FMT.
“There’s already the perception that when PH devised its manifesto, which included a promise to get rid of GST, it was done without much thought.
“So the reintroduction of GST should not be a hindrance if integrity is the main concern.”
He said he would recommend reverting to GST “because it is good for government coffers”.
“In order to subdue the general population’s protest, the rate should be less than 6%, but I think the suggested 3% is too low.”
However, he warned that the tide would swiftly turn against PH should the tax’s return lead to an increase in the prices of goods.
That would be suicide in the face of the 15th general election, he said.
Early this week, in recommending the return of GST with the 2020 national budget, MIER chairman Kamal Salih said the tax helped to keep the government afloat when crude oil prices declined to below US$36 per barrel in 2015.
Several economists have voiced support for the think tank’s suggestion, saying GST would be better than the sales and service tax and easier for businesses to comply with and for the government to administer.
Former deputy finance minister Ahmad Maslan has also welcomed the proposal, saying it could help the government reduce its reliance on oil revenues and foreign borrowings.
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