GST Malaysia
About GST Malaysia
Malaysia introduced GST at 6 percent in 2015 under Prime Minister Najib Razak. The tax replaced the existing sales and services tax and broadened the tax base. GST raised significant revenue but was deeply unpopular. The opposition, led by Mahathir Mohamad, campaigned on abolishing GST in the 2018 election. After winning, Mahathir abolished GST and replaced it with the Sales and Services Tax at lower rates. The abolition cost the government approximately 20 billion ringgit in annual revenue. The frequent changes in tax policy created uncertainty for businesses. The episode demonstrated the political risks of consumption tax reform. Malaysia remains one of the few Asian countries without a comprehensive GST or VAT system.
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