The GST is on the way, stirring up a lot of controversies. Penang Monthly offers an understanding of what it will mean to the common man.
The likelihood is very high that the National Budget being tabled on October 25 will introduce the country to a Goods and Services Tax (GST). This move is driven by a combination of several external macroeconomic and domestic factors.
First, several international ratings agencies have voiced concerns about Malaysia’s mounting fiscal debt, meaning that the country is at risk of a drop in its credit rating1. As we know, Malaysia’s fiscal budget has been in deficit since 1998 (see Figure 1). That makes 15 years in a row, showing that the fiscal deficit is now structural rather than cyclical in nature.
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