KUALA LUMPUR, Malaysia said it will introduce a sales and service tax to partly offset the shortfall in revenue from effectively scrapping a goods and service tax (GST) from June.
The Mahathir Mohamad-led government, which won last week’s general election, said on Wednesday it would lower GST to zero per cent from June 1. Ousted leader Najib Razak had introduced the tax in 2015 amid lower oil prices.
In a statement on Thursday, the ministry of finance said the shortfall in revenue will be supported by specific revenue and expenditure measures that will be announced soon, including the reintroduction of the sales and services tax.
Expenditure reduction will begin with rationalisation, efficiency measures and reduction in wastages. Of significance, oil prices have been higher than the US$52 per barrel estimated for Budget 2018. This provides fiscal buffers for the immediate future.
Fiscal responsibility, transparency and governance will be a paramount consideration in rolling-out the fiscal reform, the MoF said.
It did not say when the sales tax will be introduced.
Source: NAM News Network