Opposition pact Pakatan Harapan (PH) today objected to the reintroduction of a goods and services tax (GST) as raised by the prime minister in a recent interview, saying any move to this effect would cause a drastic spike in the price of goods.
In a statement, it said the people were already struggling with the rising cost of living and declining household incomes amid high inflation.
“Bringing back the GST will cause a surge in the price of goods,” it added.
“Add this to the supply chain problems and stagnant wages, and the people will be placed udner tremendous pressure.”
Malaysia’s 6% GST was introduced in 2015 but scrapped three years later after PH, led by Dr Mahathir Mohamad, took over Putrajaya.
PH’s pledge to do away with the consumption tax was one of the key planks in its manifesto for the 2018 general election, which saw Barisan Nasional toppled after more than six decades in power.
Ismail had said in an interview with Nikkei that the government was keen on reintroducing the tax despite its unpopularity.
He said Putrajaya had limited options, and that it had lost RM20 billion in annual revenue after the tax was abolished.
He also said that the government would target a GST rate that did not burden the people, but was not so low that it “defeats the purpose of expanding tax revenue”.
PH, in the statement signed by its top leaders Anwar Ibrahim, Mohamad Sabu, Anthony Loke and Madius Tangau, said it made no sense for the government to suggest the collection of more tax without first proving the reforms and administrative improvements it had put in place.
“There is no point collecting more tax if in the end, the people’s money is wasted because of corruption, leakage and cronyism,” it said.
“The prime minister should also recall that the majority of Malaysians rejected the GST at the last general election.
“PH is therefore against any suggestion to reintroduce the GST, as long as these issues continue to plague the people.”