The government has not yet reached the stage where it would need to reintroduce the goods and services tax (GST), Deputy Finance Minister I Mohd Shahar Abdullah says.
He said this was attributed to the strong recovery momentum of the national economy with a growth of 6.9% in the first half of this year and supported by increased domestic and foreign demand as well as labour market recovery.
“In this regard, the government is confident that the national economy will achieve a growth projection of between 5.3% and 6.3% for the year 2022,” he said.
Shahar was answering a question from the floor on whether the government would reintroduce the GST during his ministry’s engagement session with the Associated Chinese Chambers of Commerce and Industry of Sarawak yesterday.
Shahar said in order to ensure the momentum of the country’s economic growth, the government's focus in the upcoming budget would be on reform initiatives to improve the people's well-being, especially through increasing income and social protection, business competitiveness and related value chains, as well as strengthening the country’s resilience against future shocks.
He said the national inflation level for the first six months of 2022 recorded a rate of 2.5%, much lower than the inflation rate in other countries, and remained under control due to the implementation of price control measures and the granting of subsidies by the government.
Following the move to continue and improve subsidies, he said expenditure on aid and subsidies was estimated to increase to RM77.7 billion compared to the allocation in Budget 2022 of RM31 billion.
“Without the subsidies provided for basic goods, it is estimated that inflation would reach 11.4%,” Shahar said.