THE International Monetary Fund has given the thumbs up to Malaysia’s fiscal reform via the broadening of the tax base with the implementation the Goods and Services Tax (GST) starting April 1.
Its Fiscal Affairs Department adviser, Kiyoshi Nakayama, said the shift of revenue source from natural resource and corporate income to also include GST was a crucial policy direction to maintain Malaysia’s long-term fiscal sustainability.
In his presentation at the International Seminar on GST 2014 yesterday, he said the growth-friendly tax was less distortive for economic growth compared with income tax.
“GST, a consumption-based tax, will not burden savings and investment. But, its design also matters.”
He commended Malaysia’s preparation in implementing GST, saying the Finance Ministry and Royal Malaysian Customs Department’s communication strategy of engaging social media was innovative. Bernama