The former Umno Youth chief said the existing sales and service tax (SST) has not been comprehensive enough to boost the government’s coffers, which is now crucial amid global uncertainties and higher subsidy spending.

Khairy said a small tax collection base would affect the country’s preparedness for crises such as geopolitical conflicts or pandemics like Covid-19.

He said he had conveyed this view to Prime Minister Anwar Ibrahim, who is also the finance minister, about a year after the unity government was formed.

“I begged Anwar, that if there was one thing he could do, bring back the GST. They don’t have to even call it GST, just revive it. They could brand it as the ‘fair and equitable tax’ or ‘Madani tax’, that’s fine.

“Otherwise, the (tax revenue collection) base isn’t strong enough. When we politicise the country’s economic management, the people suffer,” he said during a roundtable organised by Umno Youth at World Trade Centre Kuala Lumpur today.

The GST, a multi-stage consumption tax, was introduced in April 2015 at a rate of 6% before being zero-rated in June 2018.

It was replaced by SST in September 2018 in line with the manifesto of the then Pakatan Harapan-led administration.

The government has repeatedly dismissed calls to reinstate the GST, with deputy finance minister Liew Chin Tong saying in February that this would only be considered when Malaysia’s median wage exceeds RM4,000.

The national median monthly wage currently stands at about RM2,800.

Khairy said the GST was scrapped in 2018 merely because of political considerations.

He did not think the GST had burdened Malaysians when introduced as certain essential goods and services were exempted or zero-rated, including daily necessities as well as healthcare and education services.