GST is not coming back, says Lim

by NG MIN SHEN/ pic by MUHD AMIN NAHARUL

THE government does not intend to reintroduce the Goods and Services Tax (GST) despite suggestions from economists and political leaders that reinstating the tax could boost the government’s coffers, said Finance Minister Lim Guan Eng.

“I’ve not heard that proposal, but we already abolished the GST in June last year. So, there are no plans to bring back the GST,” Lim told reporters on the sidelines of 1 Utama Shopping Centre’s e-wallet and e-commerce platform in Petaling Jaya last Friday.

The Pakatan Harapan (PH) administration had abolished the GST as outlined in its manifesto after thumping Barisan Nasional in the 14th General Election last year. The new government later passed a bill to repeal the consumption-based tax.

It was replaced with the Sales and Service Tax (SST) in September 2018. The SST charges 10% for goods sales and 6% for the provision of services.

In January this year, Lim said the government’s SST collection for the last four months of 2018 — since the SST was implemented — stood at RM5.4 billion.

For 2019, the administration expects the SST collection to amount to RM22 billion, Deputy Finance Minister Datuk Ir Amiruddin Hamzah said in July.

Under the previous government, a total of RM44 billion was collected from the GST in 2017.

Meanwhile, the Cabinet had discussed the second Samurai bond and had made a decision on the matter, Lim said.

“Please wait for the official statement because this involves Samurai bonds in Tokyo and I think a proper statement would be issued,” he added.

Prime Minister Tun Dr Mahathir Mohamad said last month that Malaysia is considering issuing a second Samurai bond, confirming a report by The Malaysian Reserve.

He later said his Japanese counterpart, Shinzo Abe, has already given his approval for the bond issuance.

Malaysia issued its first Samurai bond in 30 years in March, as part of the government’s efforts to raise funds to repay borrowings incurred by the previous government.

Lim said the public debts of RM150 billion are preventing the government from fulfilling its pledge to raise oil royalties for Sabah and Sarawak from 5% currently to 20%.

These “legacy issues”, largely related to 1Malaysia Development Bhd, have made it difficult for PH to implement its promises nationwide.

Lim said the government had resorted to several measures to fulfil its promises including terminating the project delivery partner agreement for the Pan-Borneo Highway to rationalise the costs.

“We (will) also announce certain measures to show our prioritisation of Sabah and Sarawak has not diminished,” he said, adding that the government will “definitely” relook into fulfilling the promises once the economy improves.

The minister was speaking to reporters after launching 1 Utama’s 1PAY retail e-wallet and oneshop.com.my, a mall-wide online shopping platform.

1 Utama director Tan Sri Teo Chiang Kok said there are currently 25,000 immediate users of 1PAY, which is an enhancement of the mall’s existing loyalty programme, ONECARD Privileges+. Some 30% of the mall’s retailers have signed up for the e-wallet since its rollout in March 2019.

“Our target is to achieve 50% of our ONECARD membership base to use 1PAY by December 2020, and 80% to 90% of retailers signing up for 1PAY,” Teo said.