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,Ever since suggestions for the GST revival emerged, anyone who weighed in has drawn much flak from the public regardless of media platform.The public’s comments have been mostly one-sided.

ABOLISHED in 2018, the goods and services tax (GST) that was initially introduced in 2015 seemed to be coming back. There have been numerous calls and proposals in recent years, from our Prime Minister to the Finance Minister and various business groups in the private sector.

They have been coming up with multiple suggestions for re-implementing the GST. These are the indication that the government will soon bring back the GST regime.

Many may ask, why are businesses that used to oppose the GST now calling for its revival? How has a tax system implemented in more than 170 countries and regions worldwide caused so many controversies back then and indirectly led to the historic change of government since Malaysia’s independence?

Ever since suggestions for the GST revival emerged, anyone who weighed in has drawn much flak from the public regardless of media platform.

The public’s comments have been mostly one-sided.

Are these experts and learned personalities ignorant of the people’s suffering and only see the GST’s benefits while ignoring the disadvantages?

Why do we need the GST? Let us first look at Malaysia’s financial situation over the past few years:


We can see that from 2017 to 2022 (figure 1) that the government’s total expenditure had increased by 27.4%. Still, the total revenue, mainly from various taxes, had only increased by 6%.

If this goes on, not only will the country not break even, but our deficits will go up, and the outcomes are going to be unbearable.

In Budget 2022’s total expenditure of RM332.1bil, 5.2% (RM17.26bil) has been allocated for various subsidies and social assistance.

Let’s take a look at our fuel subsidy. According to data from the Finance Ministry, in January alone, fuel subsidy increased to RM2bil following a surge in the world oil prices – which was 10 times that of the same period last year.

As of March, fuel subsidy has exceeded RM4bil.

The people will have to pay for these expenses.

Compounded by issues such as an ageing population and burdening healthcare and social welfare needs, a tax regime reform is imminent.

There have been many expert explanations on how the GST works. So let us focus on some comparisons between the GST and the sales and service tax (SST).

The general public has opposed the GST because many do not understand how it works. In reality, the SST is included in the cost of a product but not stated on the invoice.

Many people are not aware that they have been paying the SST. It is a different case for the GST, which, in contrast, is more transparent, as businesses are required to state clearly the taxes levied on each invoice.

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