KUCHING: Members of the public have expressed mixed reactions to the call to reintroduce the goods and services tax (GST) to boost government coffers.
This follows a recent Free Malaysia Today report where economists opined that reintroducing the GST was essential for strengthening the country’s financial position due to the uncertainties in the global economy.
They highlighted that the previously announced increase of the sales and service tax (SST) to 8 per cent in the 2024 budget would only bring “minuscule increase in the grand scheme of things,” therefore GST could potentially double the country’s revenue due to its broader tax base.
New Sarawak Tribune talked to the public to get their views on the potential reintroduction of the goods and services tax (GST).
BRANDON TIE, 29
(Businessman)
In my opinion, the reintroduction of the GST is a good idea. Apart from improving government revenues, it can spur the industries to grow. The government can also plan its budget more effectively. On the other hand, the government needs to also consider how to help the people to survive because the GST will affect lower-income individuals.
LING WAN LING, 28
(Businesswoman)
Introducing the GST during a recession in Malaysia may not be a good idea. While it could offer a more stable revenue source, it might lead to higher inflation. This can be tough on consumers who are dealing with increased living costs as well as businesses which are trying to recover.
The lower-income (B40) group will be hit hardest as they spend a big part of their earnings on goods and services that will be taxed. GST is an additional tax on top of income tax, and maintaining the same income tax rate may pose financial challenges.
To ease the burden on the lower-income group, the government could consider excluding essential goods from GST but this might create market distortions as people focus on those goods. A possible solution could be reintroducing GST with a lower rate and clearer mechanisms.
NUR FATIHAH CHIN HASHIM CHIN, 24
(Entrepreneur)
The reintroduction of the GST may have a negative impact on low-income groups. In a situation where income levels are still low and the cost of living is increasing due to GST, the move will burden those with lower incomes even more. From the perspective of small business owners, this situation also has unfavourable consequences, posing a dilemma for them. If they raise their prices, it will be challenging for them to retain customers. However, if they do not raise prices, they will suffer losses.
ZUREEN AZZAWA ABDULLAH, 26
(Freelancer)
As commonly known, SST is only imposed on manufacturers and importers, not the entire supply chain. Meanwhile, GST is imposed on almost all services such as food and beverages, insurance, and many more. Honestly, as a consumer, I would prefer to be subjected to the GST compared to SST.
GST increases not only government revenues but also provides more substantial benefits or returns to entrepreneurs. Moreover, the government is also proposing to set the GST at four per cent compared to the initial introduction at six per cent. Therefore, it is undeniable that the reintroduction of GST is a good idea.
SITI NURHAZIQAH YAHYA, 25
(Data Standardisation Analyst)
I agree with the reintroduction of the Goods and Services Tax (GST) because it can improve fiscal outputs and reduce the national spending deficit. The implementation of the GST allows the government to generate revenue from a broader and more diverse source.
However, the cost of living may rise as the prices of goods increase, burdening the livelihoods of the people. The introduction of the GST is likely to contribute to inflation, leading to a higher cost of living. In essence, to address concerns related to the GST, income redistribution and exemptions for essential goods should be considered.
