While he applauded the 2024 budget announcement last Friday, which saw the sales and services tax (SST) increased from 6% to 8%, the former Umno Youth chief said the government should continue expanding its tax base with the reintroduction of GST.
“Although I applaud the prime minister for moving in that direction, in addition to the details previously announced (capital gains tax and wealth tax on luxury items), I thought he should have gone the ‘full monty’ with GST since there is an increase in SST.
“Announce that by 2026, GST will be reinstated,” Khairy said in an episode of the Keluar Sekejap podcast today.
However, he said, GST should have been included in the 2024 budget as Anwar still has four years left before the next general election expected in 2027.
A 6% GST was introduced in 2015 under then prime minister Najib Razak, but it was abolished by the former Pakatan Harapan government and replaced with the current SST system in 2018.
In the lead-up to the 2024 budget announcement, many parties had called on the government to reintroduce the tax in next year’s budget to increase the government’s revenue.
However, Anwar announced instead that the SST rate hike does not include services such as food and beverages and telecommunications.
Overall, Khairy said he was satisfied with the budget Anwar had announced, proving his commitment towards economic structural reforms and bringing down the fiscal deficit.
He also said he believed the budget signals the government’s intention to rationalise subsidies by restructuring diesel subsidies and lifting the temporary price controls for the chicken and egg market.
Last Friday, Anwar announced that logistics companies and certain groups will continue to enjoy subsidised diesel, but other users will have to pay a higher price as part of the government’s plans to restructure fuel subsidies.
He also announced that the temporary price restrictions would be removed to allow the local market to operate without constraints, ensuring an ample supply of chicken and eggs.