The contentious goods and services tax (GST) was mooted way back in 1984 but the federal government at the time didn't have the "political courage" to do it, said Prime Minister Najib Abdul Razak.

During a question-and-answer session at the launch of the National Transformation Plan (NTP) annual report today, Najib said GST was a right decision, but it came with a political cost.

"(My administration was) willing to bear the political costs because it is the right thing to do. GST will benefit the rakyat and the country.

"I am convinced (of this)," said Najib, in responding to questions from NTP advisor Idris Jala.

The GST was introduced in 2015 and Najib insisted that the government had implemented a soft landing approach with exemptions for up to 578 essential items to date.

Najib also pointed out that the country had recorded its highest inflation rate of 8.4 percent in July 1998 while the current and also the lowest figure recorded was at 1.4 percent as of last month.

"So if we want to say prices are increasing because of the GST, that is not true.

"It can't be that the price of ikan kembung is going up because of GST. Fish is exempted from GST," he said.

In 1984, Dr Mahathir Mohamad was in this third year as prime minister. Najib was the menteri besar of Pahang at the time.

Mahathir, who is now the leader the Pakatan Harapan opposition coalition, has vowed to abolish the tax if his coalition wins the next general election.