Zafrul: GST reinstatement will be discussed in cabinet

The proposal to reinstate the Goods and Services Tax (GST) will be discussed in the cabinet, according to Finance Minister Tengku Zafrul Abdul Aziz.

He, however, said this will depend on how the country will fare economically next year.

"No, we didn't announce the GST in Budget 2023. We will be discussing the matter in the cabinet depending on the economy next year," he told a press conference at Parliament today.

"However, when we look at our revenue this year, it will have a positive correlation to the economy so we are expecting the economy to moderate globally when Malaysia will be impacted, but of course, we are also helped by major dividend payment by Petronas.

"The dividend payout by Petronas this year is RM50 billion, but we are not assuming the same for next year," added Zafrul.

In May, Prime Minister Ismail Sabri Yaakob said the government was keen on reintroducing the GST.

He was reported as saying that the government was aware of the GST's unpopularity but had limited options, noting that RM20 billion in annual revenue were lost after the tax was abolished.

Zafrul said the government will improve the GST in terms of its reimbursement process, business compliance, and overall administration if the government reintroduces it.

The GST, which was implemented in 2015 under BN, was abolished after Pakatan Harapan won the 2018 general election.

Royal Malaysian Customs Department director-general Subromaniam Tholasy acknowledged that there were weaknesses when the GST was introduced and suggested increasing the threshold so that small businesses like grocery stores won't be liable.

When the GST was implemented in 2015, many small-time grocery stores operated by senior citizens who could not manage the complexities of the tax system ended up closing shops.

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