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GST to go before Parliament next year, says Husni

Date: 08/12/2014

KUALA LUMPUR, Aug 24 — Putrajaya will table a Bill for a goods and services tax (GST) in Parliament next year, Datuk Seri Ahmad Husni Hanadzlah said today, in the latest sign the consumption tax is creeping closer to implementation.

The second finance minister said the government was now gathering views from stakeholders on the tax, according to national news agency Bernama, before bringing it lawmakers.

"We are now holding talks with the non-governmental organisations and corporations before any decision on the GST and this will take into consideration the well-being of the rakyat," he told a media briefing after opening a surau in Kampung Kuang Hilir here today.

Ahmad Husni today said some 40 essential items will be exempted from the GST once it is enforced, including flour, rice and sugar.

Insisting the GST was not a new tax as it supersedes the existing sales and service tax, the minister said a broader tax base that would result from its implementation will allow the government to reduce corporate taxes.

"We must find ways to reduce the corporate tax to attract more foreign investors to boost economic growth and provide more jobs for the rakyat," he said.

He also said it would help fund more BR1M (1 Malaysia People’s Aid) cash handouts.

The GST had been due to be introduced in March 2010 but was put off following public resistance then.

The ruling Barisan Nasional (BN) was expected to revisit the idea once it cleared the 13th general election, which it won in May albeit with a smaller majority of 133 seats.

Putrajaya came under increased pressure last month to introduce deep-cutting financial changes such as the GST, after ratings firm Fitch cut its outlook on Malaysia’s sovereign debt over the country’s chronic budget deficit and what it described as worsened prospects for reforms.

But opposition lawmakers such as DAP’s Tony Pua have urged Putrajaya not to “punish Malaysians” with the GST following Fitch’s criticism on the country’s high national debt now pushing against the legal limit of 55 per cent of gross domestic product (GDP).

Instead, they insist it was possible to reduce both debt and the budget deficit by addressing wastages in public spending as well as eliminating corruption that they allege was plaguing government procurement.

Pua also contended that introducing a GST would not reverse Malaysia’s fortunes if the government did not concurrently rein in its spending and wipe out graft, pointing out that high consumption taxes in Greece, Spain, Ireland, Portugal and Italy — which are up to 23 per cent — did not save those countries from their severe financial crises.more...​