ANY move to bring back the goods and services tax (GST) would burden poorer households who are not paying income tax and push up inflation, warns Pandan MP and former economy minister Datuk Seri Rafizi Ramli.
Speaking on the latest episode of the Yang Berhenti Menteri podcast, Rafizi said GST was a regressive tax that would force low-income families – previously exempt from income tax under the current sales and service tax regime – to “pay tax for the first time”.
“But when GST is imposed, all daily essentials are taxed. That could mean RM1,000 to RM2,000 a year in new costs for families who have never paid any (income) tax before,” he said, adding that the 2015 GST rollout saw prices jump by 6% to 7%.
“In Malaysia, once prices go up, they rarely come back down,” he said, urging the government to keep inflation around 2% and implement wage reforms before considering the tax.
Rafizi’s latest remarks echo earlier warnings in 2023, when he acknowledged GST’s efficiency in combating tax evasion but cautioned against using it as a “shortcut” to raise revenue without fixing governance and spending efficiency.
“Once it is seen to raise income, it becomes addictive… you just keep raising it from initially 5%, then 7% and eventually it will be 20%,” he said at the PTD Alumni forum in February 2023.
Still, Rafizi as a minister, has previously left the door open to a GST comeback, telling reporters in September 2023 that reviving the tax “remains an option” as part of a wider strategy to strengthen fiscal sustainability.
At the time, he said the government’s focus was on introducing a capital gains tax in 2024, with any decision on new taxes to be announced during budget presentations.
His comments then came after calls by MCA president Datuk Seri Dr Wee Ka Siong and several economists for GST’s return, provided safeguards were in place.
The current unity government has so far ruled out reintroducing GST in the near term.
Finance Minister II Datuk Seri Amir Hamzah Azizan last month described it as “impractical” under current economic conditions, while Prime Minister Datuk Seri Anwar Ibrahim said the tax would only be considered once the economy improves and the minimum wage reaches RM4,000 or more. — Aug 9, 2025
