We would’ve lost RM45b without GST, says Irwan

KUALA LUMPUR: Malaysia will lose RM416.6 billion in revenue if the Goods and Services Tax (GST), tolls, National Higher Education Fund Corp (PTPTN) loans and excise duty are abolished.

Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah said abolishing GST would cause the country to lose RM45 billion, while toll (RM338 billion), PTPTN (RM3.9 billion) and excise duty (RM2.4 billion).

He said this would increase the country’s debt.

“When GST was introduced in Malaysia on April 1, 2015, the oil price fell from US$100 per barrel to less than US$40 per barrel, and the government’s revenue decreased. We cannot be uncertain.

“If we forgo GST, we will lose RM45 billion, and even if we were to reintroduce the Sales and Ser- vice Tax (SST), the collection will amount to RM18 billion. So, how can we find RM27 billion?” Irwan said.

“On tolls, the Finance Ministry will have to pay compensation to companies because they have investors, such as the Employees Provident Fund, which earn money from these tolls.

“In the Klang Valley there are 19 tolls, while outside the Klang Valley, there are 12. If the government wants to step in, we have to pay RM338 billion.

“If we add the RM338 billion to the national debt of RM686 billion, our debt will increase to more than RM1 trillion. If we divide the size of Malaysia’s RM1.3 trillion economy, it means that our country’s debt has risen to 78 per cent.”

Irwan said Malaysia had a policy where national debt should not exceed 55 per cent of gross domestic product, which was now at 50 per cent.

“When we are in debt, the rating agencies will rate us. Now, we are at ‘A-’, a strong rating.

“Investors will come when the nation is stable.”

On PTPTN loans, Irwan said the government gave relief.

“If the student’s score is good, he does not have to pay back PTPTN. If he is consistent in paying, PTPTN will give a 10 to 20 per cent discount.

“Our economy is on a solid track. It grew 5.9 per cent last year. This year, we expect the economy to grow between five and 5.5 per cent.”

He said the inflation rate was under control and expected to be two to three per cent this year, while the unemployment rate was at 3.4 per cent.

He said the ringgit strengthened at RM3.90 against the US dollar.

“We will keep this momentum.”

When we are in debt, the rating agencies will rate us. Now, we are at ‘A-’, a strong rating. Investors will come when the nation is stable.