Malaysia’s inflation has dropped to two per cent after the Goods and Services Tax (GST) was implemented last year.
Finance Minister II Johari Abdul Ghani said last year the inflation rate was at 3.435 per cent.
“But today, we see our inflation has reached a normal range of about two per cent,” Johari told the Dewan Rakyat when replying to Abdul Hadi Awang (PAS-Marang) during Question and Answer Time.
Hadi had asked if the government would consider an alternative to the GST since the consumption tax had led to higher cost of living.
However, Johari said the government could not remove GST as the system stops leakages and ensures businessmen do not escape paying taxes.
“If they do not pay taxes to the Customs Department, they will be caught when they sell their goods. GST stops these leakages.”
Before GST was implemented in April last year, the government collected taxes through the Sales and Services Tax (SST).
Johari also revealed that as of Oct 10, 2016, the government had collected RM29.3 billion.
Last year, the government collected RM27.3 billion from April to December.
Yesterday, in Parliament, Prime Minister Najib Razak said the national economy would be crippled without the GST.
FMT Reporters Online