KUALA LUMPUR, 18 October: Prime Minister Datuk Seri Najib Abdul Razak today said that he will not remove or reduce the Goods and Services Tax (GST) as doing so will paralyse the Malaysian economy.
He said it was its implementation that helped save the country’s economy.
“I want to reiterate in this Dewan, without GST Malaysia’s economy will be paralysed. Actually, GST is the saviour of our economy,” he told the Dewan Rakyat.
Najib, who is also Finance Minister, was responding to a supplementary question from Liew Chin Tong (DAP-Kluang), who asked how the government plans to increase domestic consumption that are facing a reduction due to GST implementation.
To this he replied – “That is always the negative interpretation of the Opposition.”
Later in the Parliament’s lobby, Liew argued that reducing GST to spur local demand and consumption is sound economics.
He said the Malaysian economy is primarily driven by domestic demand and consumption and Najib should not have dismissed his views so easily and curtly.
“Domestic consumption had slowed due to GST. Along with falling oil prices and depreciation of the Ringgit, domestic consumption is even lower,” he told a press conference.
Furthermore, Liew said GST did not save the economy as Najib claimed, but merely provided more funds for the government and the treasury.
Earlier Najib said the country’s economy has remained firm and is still spurring an encouraging growth through the strengthening of economic and financial structure.
“This includes the implementation of GST last year, which has borne the shortage of government revenue due to the drop in global oil price and subsidy rationalisation to the target group,” he said to a question by Dr Tan Seng Giaw (DAP-Kepong).
Tan had asked Najib on the current economic situation and the government’s efforts to improve it.
Najib said the GDP growth is estimated at 4%-4.5% and looking at the performance in the first half of the year, it is at 4.1%.
He said Malaysia recorded 5% of GDP growth last year compared to Indonesia’s 4.8%, Thailand’s 2.8%, Korea’s 2.6% and the global GDP growth of 3.2% for the same period.
“The reduction in the growth this year compared to last year is due to the slow momentum of the global economic growth.
“Malaysia’s export reduced. The weak international market has also caused the drop in commodity prices like oil, gas, palm oil and mineral,” Najib said.
— THE SUN