Malaysian GST will start from 4% to 10% eventually

Datuk Dr Awang Adek Hussin, the Deputy Minister of Finance said that the government will not be changing the proposed plan of 4% as the rate for GST (Goods and Services Tax) and denied claims that it might be raised to 10%. He said “The government believes that although the GST has been set at four per cent, it will have a neutral impact on inflation and on the overall government revenue. Tax collection can also increase through efficient GST collection and higher tax collection compliance level”

Speaking to the Dewan Rakyat, he added that “What’s important is to ensure the information on tax collection mechanism and GST implementation trickle down to the people from all strata of society. The GST’s main objective was to restructure the country’s taxation system to be more comprehensive, efficient, transparent and business-friendly. There are lots of advantages to address the weaknesses in the present taxation system. This is because the GST paid by traders for business inputs like raw materials, telephone bills and office equipment can be claimed as credit from the government,” He also said “This is because many countries have implemented the GST even though their per capita income was much lower than Malaysia. Venezuela, Sri Lanka, South Africa and Sudan have already enforced GST. This clearly showed the per capita income level is not the yardstick to implement GST,”