PETALING JAYA: The National Chamber of Commerce and Industry of Malaysia (NCCIM) today said the reintroduction of the Goods and Services Tax (GST) at a four per cent rate, is the best way to boost government revenue.
NCCIM president, Tan Sri Soh Thian Lai, said that the GST is a comprehensive tax that covers all groups compared with the various new taxes introduced now which is focused on taxing only a few groups.
He said the NCCIM, which is a coalition of five business councils namely the Malaysian Malay Chamber of Commerce (DPMM), the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), the Malaysian Associated Indian Chambers of Commerce and Industry (MAICCI), the Federation of Malaysian Manufacturers (FMM), and the Malaysian International Chamber of Commerce and Industry (MICCI), agree that GST 2.0 should be reintroduced at a rate of four percent.
Soh said the various new taxes introduced by the government have only worked to put pressure on businesses therefore, it is reasonable to have a clear political view by reintroducing GST.
"If GST 2.0 is reintroduced, all parties will be taxed including foreign workers in this country. Currently, they are not subject to any tax.
"Moreover, the amount obtained from GST is also higher compared to existing taxes. The government can also redistribute the revenue from GST to those in need through rebate or voucher schemes for petrol, energy, or retail.
"One tax for all. The government can increase revenue, the people can get tax refunds through voucher or rebate schemes, and businesses can continue to be competitive," he said when met at the NCCIM National Economic Forum 2024 here today.
Soh said Malaysia is currently facing various challenges that require joint attention and concerted action.
He said the surge in technology with advancements in artificial intelligence, automation, and digitisation not only enhances efficiency but also poses challenges to industries.
He added that the adoption of technology and digital innovation also exposes businesses to cyber attacks.
"The interconnectivity of the global market exposes all parties to weaknesses stemming from external shocks and economic fluctuations, emphasising the need for resilience and strategic planning," he said.
Soh added that the International Monetary Fund (IMF) has raised its growth forecast for the Malaysian economy reflecting better prospects for the advanced economy.
He said the main drivers of global growth in 2024 are the potential recovery in global trade surging to 2.6 percent from a contraction of 1.2 percent in 2023.
"In 2024, the Malaysian economy is poised for recovery driven by exports as well as increased investment and tourism sectors," he said.
"However, consumer spending may be more limited in 2024 with the weak ringgit exchange rate, increased service tax rates, and government subsidy rationalization programs putting pressure on inflation and cost of living," he added.