Malaysia's new government on Wednesday said it would reduce a goods and services tax to zero from June 1, effectively abolishing it, a move that is likely to spur spending in the Southeast Asian nation but put pressure on its fiscal position. Items that have already been GST-exempt will remain as is.
The release also mentions that all registered businesses must follow the new zero rating and they must adhere to the current practice of issuing tax invoices, submission of tax statements and claiming of input tax credit.
The Ministry said the traders must also ensure that the prices of goods and services comply with the Price Control Act and Anti-Profiteering Act 2011 at all times.
The ministry's announcement comes nearly a week after the Pakatan Harapan (PH) coalition took over as federal government.
Prime Minister Mahathir Mohamad, who won last week's general election, had vowed during the campaign to get rid of the 6 per cent GST to address the rising cost of living.
"Whatever excess taxes collected under GST will be refunded", he told reporters at Yayasan Perdana, today.
It is worth pointing out that GST isn't abolished yet and at the time of writing, there's still no official announcement of reintroducing the previous Sales and Services Tax (SST) in Malaysia.
A customer buying the Toyota C-HR is paying RM8,200 in GST, thus, from June 1st 2018, will the Toyota C-HR be priced to RM137,300?
Zeti said this could be done by re-prioritising projects, improving efficiency, cutting wastage in the public sector and by seeking new revenue sources.