Johan: Important to implement subsidies correctly

PETALING JAYA: The government has not made a decision on the reintroduction of the goods and services tax (GST) that was abolished in 2018, says Treasury secretary-general Datuk Johan Mahmood Merican.

The government will remain focused on introducing new measures instead of increasing the country’s tax revenue, according to Johan.

“The priorities for next year will be on implementing subsidies correctly.

“We have started with ending the chicken subsidies this month and will be working towards electricity and fuel subsidies next,” he told reporters yesterday during the Deloitte TaxMax – The 49th series: Sustaining growth for a better tomorrow conference.

On the high-value goods tax, Johan said: “The Prime Minister has emphasised that the government is a listening government and has received feedback on this.

“The feedback was that the tax must be structured in a way that allows credit for tourists given that we are in a post-Covid time and the tourism industry is also in recovery.

“There will be new legislation next year where more details on the scope of the tax will be announced,” he noted.

Johan pointed out that the new regulation was still undergoing a consulting process and the exact scope and threshold of revenue to be collected would be clearly identified.

On separate note, Socio-Economic Research Centre executive director Lee Heng Guie said the ringgit was undervalued because it did not reflect the significant deterioration of the fundamentals of Malaysia.

According to Lee, no country would be able to fight the kind of pressure wielded by the US dollar and the high interest rate in the United States.

“Is the weakening of the ringgit due to external pressure from the dollar or is it internal weakness?

“There are some clear indicators that we have a lot to do – like fixing the country’s fiscal deficit, controlling debt levels, improving exports and ensuring our trade balance remains strong,” he said.

Lee added all parties must work together and continue to improve so that the country could attract more foreign direct investments, direct domestic investments and a sustainable economy.

“By next year, the dollar may weaken. This could be in the second or even third quarter of 2024 and so we can expect to have some pressure off the ringgit.

“For now, we just need to stomach the weaker ringgit while strengthening our fundamentals,” he added.