KUALA LUMPUR, March 10 — The government has no plans to review the Goods and Services Tax (GST) rate as the current 6% is reasonable, the Dewan Rakyat was told Thursday.
Deputy Finance Minister Datuk Johari Abdul Ghani said prior to implementation of the GST, a detailed study had been made, to ensure the rate was most suited to the prevailing economic conditions.
“Taken into consideration was the tax rate before the GST, that is, 10% t for goods and six per cent for services.
“At the same time, various other factors, including the composition of revenue from specific sectors, the tax burden on consumers, the income tax structure and assistance package to consumers and businesses was also taken into account, in line with the objective of creating a competitive tax structure,” he added.
Johari was answering a question from Wong Tien Fatt@Wong Nyuk Foh (DAP-Sandakan) who had asked if the government would review the GST rate due to lesser revenue going into its coffers from the decline in global oil prices.
On a proposal by Wong for the government to reduce the GST rate for Sabah as the people there pay higher prices for goods compared to the peninsular, Johari maintained that the current rate was still suitable.
“This is because a number of essentials are zero rated, such as basic food, chicken and meat, agricultural products, sea food, public transport, housing and education.
“The government is also constantly improving assistance via facilities as the Kedai Rakyat 1Malaysia and the 1Malaysia People’s (BR1M) from the collection yielded by the GST,” he added.
The GST became effective from April 1 last year, replacing the Sales and Services Tax (SST) at 16%.