Mustapa: Not easy to plug leakages to make up for GST shortfall

Former minister Mustapa Mohamed says instead of abolishing the GST, the government should fix its weaknesses. (Youtube screengrab)

KUALA LUMPUR: Former international trade and industry minister Mustapa Mohamed (BN-Jeli) said it is “easier said than done” when it comes to “plugging leakages”.

Noting that the Pakatan Harapan (PH) government was emphasising on plugging leakages to make up for the goods and services tax (GST) collections, he said: “The pressure is really intense in finding ways to plug these leakages.

“The gap between RM40 billion (collection from GST) and RM20 billion (collection from the proposed sales and services tax or SST), is too wide. Economists have also voiced their concern that it may be difficult to fill this gap (if the GST is abolished).

“Will the government promise that it will not implement additional taxes? Because I heard that there were discussions about additional taxes,” he said during the debate on the motion to reintroduce the SST.

Rebutting Wong Chen’s (PH-Subang) contention that the GST would have worked better if implemented in a more suitable ecosystem, Mustapa said there would never be a “right moment” to implement the GST.

Wong, during the debate, had said the government had to first stabilise the nation’s minimum wage to create an ecosystem that could adapt to the GST.

“The Subang MP said to wait until the minimum wage is achieved, but how long will we have to wait? We have become a record holder as the first country that made a U-turn after implementing the GST.

“No other country which has implemented the tax has reversed it, except us.

“If we want to wait for the right time, we will forever be waiting as there will never be a right moment to implement the GST,” he said.

Agreeing that there were weaknesses in the implementation of the GST, Mustapa said instead of abolishing the tax, these weaknesses should be fixed.

“I agree with what was suggested by Rembau MP (Khairy Jamaluddin), the government should form a select committee to look into the weaknesses of the GST and study how it could be improved.

Mustapa said: “BN took a risk (when it implemented the GST) and sacrificed our political capital, we accept the people’s decision.

“But the people may have been misinformed on the details of GST and what it means to the country.”

He also rebutted Tony Pua’s (PH-Damansara) remark about GST being the cause of many small-medium enterprises (SME) shutting down post-implementation of the tax.

“The SMEs didn’t shut down solely because of GST. Many of them shut down due to them being unable to cope with meeting minimum wages,” he said.