Bring back GST next year to boost economy, FMM urges Putrajaya

SHAH ALAM - Federation of Malaysian Manufacturers (FMM) has urged Putrajaya to reintroduce the goods and services tax (GST) in the upcoming 2024 Budget.

However, the rate should not burden the rakyat, it said in a statement.

The move, it said will boost the economy while reducing fiscal deficit and government debt.

It said as a broad tax base system would increase indirect taxes, it will give flexibility to the government to reduce direct taxes such as personal income tax and corporate tax to make Malaysia a more attractive business destination.

FMM also believed the implementation of GST 2.0 should not be viewed in isolation but rather as a component of a comprehensive evaluation of Malaysia's tax structures after extensive consultation with stakeholders.

Based on MIER Business Conditions Survey 1H2022 conducted in Aug 2022, since the GST has a fairer tax structure and does away with the cascading and compounding of taxes that are frequently found in the Sales and Service Tax (SST) regime, over three quarters (74%) of poll respondents highly supported the GST's replacement of the SST.

"Prices of Malaysian exports will become more competitive on the global stage as no GST is imposed on exported goods and services while GST incurred on inputs could be recovered along the supply chain."