Malaysia to introduce sales and service tax after scrapping GST

Lai Seng Sin | Reuters
Mahathir Mohamad, former Malaysian prime minister and opposition candidate for Pakatan Harapan (Alliance of Hope) reacts during a news conference after general election, in Petaling Jaya, Malaysia, May 9, 2018.

Malaysia said it will introduce a sales and service tax to partly offset the shortfall in revenue from effectively scrapping a goods and service tax (GST) from June.

The Mahathir Mohamad-led government, which won last week’s general election, said on Wednesday it would lower GST to zero percent from June 1. Ousted leader Najib Razak had introduced the tax in 2015 amid lower oil prices.

In a statement on Thursday, the ministry of finance said the shortfall in revenue will be supported by specific revenue and expenditure measures that will be announced soon, including the reintroduction of the sales and services tax.

It did not say when the sales tax will be introduced.


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