Johari Ghani: Changing from SST to GST in short time not advisable, preparation is key

KUALA LUMPUR, Oct 29 — Former Finance Minister II Datuk Seri Johari Abdul Ghani reportedly said changing tax policies without providing sufficient notice to the Rakyat is not advisable, according to a report by Free Malaysia Today (FMT).

The Titiwangsa MP said preparation is key for the Rakyat to face the “one-off” inflation spike.

“I would expect that we would tell the people (in advance) that we’re going to introduce GST 2025, for example.

“So that the people can be prepared because we must remember that every time we introduce a new system, there’s a one-off spike into inflation,” he was quoted as saying during a Q&A session at the 2023 Youth Economic Forum at Sasana Kijang.

Johari said Malaysia is the only country to reverse the goods and services tax (GST) adoption unlike 170 countries that implemented it.

The GST was rolled out in April 2015 under the Najib government at a rate of 6 per cent and proved to be highly unpopular as it was levied at every stage of the supply chain.

It was replaced by the sales and services tax, at a rate of 10 per cent as a final charge on sales of goods, and 6 per cent for services.

In the lead up to the tabling of the 2024 budget, many parties had called for Putrajaya to reintroduce GST to increase the country’s revenue.

In his Budget 2024 speech on October 13, Prime Minister Datuk Seri Anwar Ibrahim said the government will expand service tax to cover logistics, brokerage, underwriting and karaoke.

This means the service tax rate will increase to 8 per cent.

But Anwar who is also finance minister said the service tax for certain sectors like food and beverages, telecommunications, parking and logistics, will be kept at the current rate of 6 per cent.