KUALA LUMPUR: Former prime minister Datuk Seri Najib Razak has warned the government that abolishing the Goods and Services Tax (GST) will eliminate the country’s economic advantage.
In a Facebook posting today, Najib listed four implications to the country’s economy with the re-implementation of the Sales and Services Tax (SST) on Sept 1, including a weakened economic structure.
“Malaysia has now lost all economic advantages, competitive traits and economic catalysts that were accorded by GST. The problems and weakened economic structure which we had back then (before GST) such as high corporate tax, tax evasion and illicit financial flow will return.
“We will also lose our capabilities to withstand economic downturns or sudden falls in exported commodity prices because we do not have the GST as a fallback. The government will also lose the ability to render aid to the needy unlike before.
“Moreover, as the price of goods did not see a reduction after GST was zero-rated, the people will be burdened with a higher price of goods when SST is implemented.”
The Barisan Nasional government had implemented the GST at 6 per cent on April 1, 2015.
Najib said it was disappointing to note that the “regressive” step was against the advice of economic experts and used as the main strategy to topple the then BN government at the May 9 general election.
“The price of goods had stabilised under GST after it was implemented for three years. That is why a zero-rated GST did not reduce the price of goods. Now, the price of goods will surely increase after SST’s implementation.”