PETALING JAYA: Malaysia’s consumer watchdog has cautioned that reintroducing GST without careful planning, safeguards and public consultation could backfire, hurting households and eroding trust in the government.
Fomca CEO Saravanan Thambirajah said the GST framework is structurally sound, but any attempt to bring it back must be gradual, transparent and backed by strong protections.
“Fomca does not support reverting to or implementing GST without proper planning, stakeholder engagement and impact assessment.
“Taxes directly affect the Consumer Price Index (CPI) and without strong controls, GST could again lead to higher prices as businesses pass costs to consumers.”
Saravanan said while the current SST is narrower than GST, it has done little to ease the burden of cost-of-living.
“Consumers continue to face rising prices for goods and services, largely because businesses pass on costs along the supply chain. Price increases tend to go up and rarely come down.”
Fomca also highlighted that GST, when previously implemented, was more transparent than SST, as it was clearly shown on receipts, allowing consumers to see exactly how much tax they were paying.
“SST, on the other hand, is often hidden earlier in the supply chain, making it harder for consumers to distinguish legitimate tax increases from unfair mark-ups.
“If GST is reconsidered, it must come with real protections for essential items and stronger enforcement to prevent abuse.”
Saravanan said GST does not need to return at its old 6% rate.
“A lower GST rate could be fairer and more sensitive to consumers, especially if essential goods are zero-rated and vulnerable groups are protected.
“The government must also be transparent about how revenue is used, enforce rules against profiteering and ensure any extra money benefits consumers directly.”
Saravanan emphasised that without proper safeguards and enforcement, simply changing the tax system will not ease the cost-of-living burden.
