KUALA LUMPUR, May 16 (Xinhua) -- The Malaysian government led by Mahathir Mohamad, who pledged to abolish the unpopular Goods and Services Tax (GST) during the campaign, said on Wednesday that the rate will be cut from 6 percent to zero effective on June 1.
"This will be implemented nationwide until a further announcement is made," the Ministry of Finance said in a statement.
The 6-percent GST was implemented on April 1, 2015.
The tax would be replaced by a sales and service tax, which was similar to the tax in place before the GST in the country.
This proposal however has raised economists' concern as the government may have difficulty in finding new sources to match the GST revenue collection, which stood at 44 billion ringgit in 2017.
But Zeti Akhtar Aziz, a former central bank governor who is serving at a temporary advisory panel for the Mahathir government, said Malaysia can meet its revenue requirements by prioritizing its projects, increasing the efficiency of the public sector, avoiding wastage and exploring new sources of revenue.
