PETALING JAYA: Reinstating the Goods and Services Tax (GST) would be the most direct and structured way to boost the country’s revenue, says MCA vice-president Datuk Lawrence Low.

He said over 160 countries worldwide have implemented GST to stabilise their fiscal foundations.

“Many (local) businesses also support a lower GST rate and propose a six- to 12-month preparation period, along with a streamlined GST refund system from the government.

“For Malaysia, the return to GST should start at a rate below 4%, allowing the public time to familiarise themselves with it.

“This could reduce the national deficit by 3% to 5%, revitalise the stock market and drive long-term growth,” he said in a statement yesterday.

Low also said the much-anticipated changes to the RON95 petrol subsidy, a key concern affecting everyday Malaysians, must be handled carefully.

“The government must phase out subsidies gradually, preventing sharp price increases that could heavily burden the people.

“A one-time removal risks triggering social issues across the board,” he added.

As for the minimum wage, currently set at RM1,500, Low, who is also MCA’s economic and SMEs affairs committee chairman, recommended a phased approach to any increase to reduce the strain on small and medium enterprises.

“Tailoring the minimum wage based on state or business size may also help balance business viability and employee welfare, especially in slower economic regions.

“Our committee also calls for extending the full rollout of the electronic invoicing system to 2027, giving small businesses more time to adjust.

“We suggest raising the exemption threshold from RM150,000 to RM500,000, allowing voluntary participation and gradually narrowing the scope until it is fully implemented.

“I also emphasise the concerns of SMEs, which have long encountered policy uncertainties.

“Frequent policy changes heighten operational costs and undermine business confidence,” he added.

Regarding new tax systems in Budget 2025, including the proposed inheritance tax, Low said that his committee also strongly opposes its implementation.

“An inheritance tax could lead to premature asset transfers to evade taxes, potentially causing societal problems, such as elderly abandonment.

“Additionally, wealthy individuals may transfer assets abroad, negatively impacting the economy,” he said.

He also said the tax would be unfair to homebuyers, particularly those investing in real estate for their children.

https://www.thestar.com.my/news/nation/2024/10/11/gst-still-best-for-revenue-boost-says-veep