KUALA LUMPUR (Feb 4): The government is likely to look into the possible reimplementation of the goods and services tax (GST), but the implementation of the tax would likely be in 2022 and into 2023.
During Affin Hwang Capital’s Malaysia Economic Outlook and Construction Sector Briefing today, Affin Hwang chief economist Alan Tan said that the implementation of the tax would not be immediate and that it would likely be a “revenue neutral rate” or a lower rate that would be more acceptable to the public.
“Similarly, the government would also be looking at the tax treatment, zero-rating exemption and setting the right threshold for businesses to register.
"As you all know, [during] the last round of the GST, one of the issues was refunds, so I think the government will look at the refund scheme to make it more efficient.
"All of this would take some time. The GST implementation will not be immediate, and that it could possibly be announced in Budget 2022 and throughout 2023,” Tan opined.
Tan viewed that with the implementation of the GST, which has a wider base than the current sales and service tax (SST), it would allow the government some flexibility to reduce corporate and personal income tax rates to make Malaysia an attractive investment destination.
The GST was set at 6% between 2015 and 2018, where upon which it was repealed by the legislature. Currently succeeding the GST is the SST, which is set at 10%.
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