KUALA LUMPUR: The reinstatement of goods and services tax (GST) will only be considered if the country's economic situation permits, the Dewan Negara heard today.
Deputy Finance Minister Lim Hui Ying said this was because the current sales and services tax (SST) implementation is capable of providing a faster fiscal impact to the country as compared to the implementation of the GST.
She also said the government's priority will also be given to the rationalisation of subsidies this year.
"The government has suspended the implementation of the High-Value Goods Tax (HVGT) and has no intention to introduce a value-added tax, better known as GST in Malaysia.
"The current SST system is capable of providing faster fiscal impact compared to the implementation of GST.
"Therefore, the implementation of GST will only be considered when there is a suitable economic environment, particularly taking into account the inflation impact of subsidy rationalisation," she said in response to a supplementary question from Datuk Ahmad Ibrahim, who had asked the finance minister about the government's further plans to reinstate GST following the delay of HVGT.
Previously, Prime Minister Datuk Seri Anwar Ibrahim said Malaysia was not ready for the reinstatement of GST any time soon.
He had also reiterated that the people's income threshold must first be increased to a reasonable level for the GST, which had been abolished in 2018, to be reinstated.
It was previously reported that the implementation of HVGT has been delayed due to the Finance Ministry's postponement in presenting the bill to Parliament.
Meanwhile, Lim said the government will also continue to prioritise and improve the existing tax systems in the country by introducing systems that will not affect vulnerable groups.
She said even if the GST was considered again in the future, the government would make sure that it would bring benefits to the people.
"Hence, any changes in policy to a consumption-based tax system such as implementing GST will be examined to ensure that it is progressive and easily administered.
"The government will also ensure that it does not negatively impact the cost of living and economic growth (of the country) and ensures sustainable revenue for the government."
She also said a continuous and inclusive educational processes must be carried out for the public to enhance their understanding about the importance of implementing consumption-based taxes for national development.
"Education regarding consumerism also needs to be enhanced in addressing issues of profiteering and businesses attempting to take advantage."