The country’s federal Opposition coalition Pakatan Harapan announced its alternative Budget 2018, proposing to eliminate the Goods and Services Tax (GST) and trim the “bloated budgets” of several ministries.
It said the elimination of GST for 2018 alone and interim re-introduction of the Sales and Services Tax, would boost consumption rates among Malaysians by 20%.
“Our policy of eliminating GST for 2018 is not a populist act, but is primarily rooted in the need to rejuvenate consumption. Our intentions are to put back RM25.5 billion into the economy and help alleviate economic hardship.”
The alternative budget was released and distributed to the media and all lawmakers in the Parliament yesterday.
The budget was drafted on an estimated 2018 revenue of RM229.44 billion, with RM200.16 billion allocated for operating expenditure, while the remaining RM58.35 billion was set aside for development spending.
It said the elimination of GST would boost consumer consumption and business activities.
“With RM25.5 billion of additional sales, we estimate this to result in some RM8.93 billion increase in profit before tax (corporate).
“This means that with the corporate income tax rate currently at 24%, the elimination of GST will boost additional income tax revenue by RM2.81 billion,” the coalition said.
It also proposed to retain the 1Malaysia People’s Aid (BR1M), with a more stringent vetting process on recipients.
“Pakatan’s position on BR1M is to maintain the same pay-out to the same category of people currently receiving BR1M. Instead of making it a direct handout, we will make BR1M conditional upon recipients performing something positive.”