Malaysia's advisory council sees S$7.6 bil revenue from new Sales and Services Tax


Tun Daim Zainuddin said bringing back the Sales and Services Tax will require legislation to be passed in Parliament.
Tun Daim Zainuddin said bringing back the Sales and Services Tax will require legislation to be passed in Parliament.PHOTO: EPA-EFE

KUALA LUMPUR (REUTERS/THE STAR/ASIA NEWS NETWORK) - Malaysians may enjoy a short tax holiday, with the new Sales and Services Tax (SST) only expected to be reintroduced in the next two to three months, according to Tun Daim Zainuddin.

The week-old Malaysian government will effectively abolish the unpopular 6 per cent Goods and Services Tax (GST) from June 1.

 

In its place, it has promised to reintroduce the SST.

But Mr Daim, who chairs a five-person council that advises the government on economic issues, said bringing back the SST will require legislation to be passed in Parliament.

"SST will be implemented soon," he told reporters at a news conference, saying the process could take two to threee months.

Mr Daim said the government expected to collect about RM30billion (S$7.6 billion) annually from the SST.

There are investor concerns on how the government would plug the revenue shortfall by eliminating the GST.

 
 
 

The GST was introduced on April 1, 2015 by the ousted Barisan Nasional government, which claimed RM44 billion (S$14.9 billion) in GST revenue was collected last year.

This year, it had forecast the consumption tax raking in another RM43.8 billion - or 18.2 per cent of total government revenue.

Mr Daim also said that the new Malaysian government will review all mega projects in the country and recommendations would be presented to the government.

"We have to review all mega projects. If it is not to our advantage, then we have to sit down and talk...," Mr Daim said.