In press release by the Finance Ministry today, the ministry said the measure to impose GST at zero rate will take effect starting June 1, 2018 and applies to the while country until further notice.
In a statement today, the MoF said it has decided that goods and services within Malaysia and those imported from overseas, which incur GST of 6%, will see the rate reduced to 0% from June 1 this year throughout the country.
"Traders will also need to ensure that the prices of goods and services are in compliance with the Price Control and Anti-Profiteering Act 2011 at all times".
Last year, the Najib Razak administration said some RM44 billion was collected in GST alone.
The announcement comes a day after former central bank governor Zeti Akhtar Aziz told Malaysians not to expect the GST removal to happen overnight, saying that it may require parliament approval.
This proposal however has raised economists' concern as the government may have difficulty in finding new sources to match the GST revenue collection, which stood at 44 billion ringgit in 2017. "The government will subsidise if there are insufficiencies", he added.
"The directive has been issued so that we ( the government) do not to collect anymore GST".
As recently as Monday, Edaran Tan Chong Motor's sales and marketing director Christopher Tan said that vehicle prices might actually go up slightly if the previous 10% sales tax (which was superseded by GST) is reinstated without changes. Mahathir has promised that "present prices will stay" even if the government has to subsidize.
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