GST could yield over RM19 billion in tax revenue

GST could yield over RM19 billion in tax revenue

GST could yield over RM19 billion in tax revenueThe government could generate an excess of RM19 billion in tax revenue in 2022 if it implements the Goods and Services Tax (GST) instead of the Sales and Services Tax (SST).

Reported by Sinar Harian, the World Bank’s Chief Economist for Malaysia, Dr. Apurva Sanghi, said the comparison is not made in nominal terms. But according to the percentage of tax revenue to Gross Domestic Product (GDP).

According to him, GST generated RM44 billion, about 2.8 percent of GDP in 2017. While 2.8 percent of GDP in 2022 is RM50 billion.

“SST only contributes RM31 billion in tax revenue, a shortfall of RM19 billion in 2022.

“This amount maybe 61 percent more with GST than SST,” he said through a transmission at X on Wednesday.

Previously, the Economy Minister, Rafizi Ramli, announced last September that the government is open to exploring any effort to expand its tax base, including reintroducing GST.

However, he explained there is no plan to implement it for the time being . He wants to focus on introducing and developing the Capital Gains Tax in 2024.

Apurva informed that the matter raised contradicts the argument that SST collection is comparable to GST. RM31 billion was obtained through SST in 2022 while GST collected RM44 billion in 2017.

He added that the disparity may be smaller, especially considering the RM19 billion spent on GST refunds.

“It is true but misleading because Malaysia’s nominal GDP is about 30 percent more in 2022 compared to 2017.

“Therefore, we need to look at the GDP percentage, not the ringgit value,” he said.

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