He said the abolition of GST would cause the country to lose RM45 billion while tolls will cost RM338 billion, PTPTN RM3.9 billion and excise duty RM2.4 billion.
He said the abolition would also increase the country’s debts.
“We will lose RM45 billion if we eliminate GST. It’s a big figure and we did not introduce it just like that We had been studying it for years before introducing it.
“A total of 160 countries in the world have implemented GST. There are various percentages, but in Malaysia, we take 6% — a more reasonable rate,” he told reporters here today.
Irwan said he was worried about wrong reports in newspapers and social media on the current economic conditions.
“More than 500 basic items, among them rice, sugar, vegetables and medical goods, are not subjected to GST because the tax here is different from other countries.
“In India, which introduced GST after Malaysia, the rates are variable, from 5-28%,” he said.
Irwan said Saudi Arabia would also introduce GST as it was too dependent on oil.
“When the oil prices drop, the government’s revenue will become unpredictable. In this respect, Saudi Arabia is in talks with experts from Malaysia to introduce the GST,” he said.
“When the GST was introduced in Malaysia on April 1, 2015, oil price fell from US$100 per barrel to less than US$40 per barrel and the government’s revenue fell.
“We cannot be in a state of uncertainty. We have to pay salaries, manage the state, hospitals and education. We need revenue.”
He said if the country did not collect revenue, the government could not implement national programmes. As the Malaysian economy grows, the revenue will increase and the country can bear the expenditure.
“If we forgo the GST, then we will lose RM45 billion and even if we were to re-introduce the sales and service tax (SST), the collection will amount to RM18 billion, so how can we find the other RM27 billion?
“For tolls, the ministry has to pay compensation to companies because they have investors, such as the Employees Provident Fund, which earn money from these tolls.
“In the Klang Valley, there are 19 tolls, while outside the Klang Valley there are 12. If the government wants to step in, we have to pay RM338 billion,” he said.
“If we add the RM338 billion with national debt of RM686 billion, our debt will increase to RM1 trillion.
“If we divide the size of Malaysia’s RM1.3 trillion economy, it means that our country’s debt would have risen to 78%,” he said.
Irwan said Malaysia had a policy where national debt should not exceed 55% of gross domestic product. It is now at around 50%.
“When we are in debt, the rating agencies will rate us. Now, we are at ‘A-’, a strong rating. The investors will come when the nation is stable.
“However, if the debt grows bigger, investors will not invest and the economy will be unstable.”
On PTPTN loans, Irwan said the government also gives relief.
“If the student’s score is good, he does not have to pay back PTPTN. If the person is consistent in paying, PTPTN will give 10-20% discount.”
He said the country’s economy was on track in terms of financial management and recorded a growth of 5.9% last year.
“This year, we expect the economy to continue on a solid track at 5-5.5%.”
He said the inflation rate was under control and expected it to be 2-3% this year. The unemployment rate is at a low of 3.4%. The ringgit has strengthened at RM3.90 against the US dollar.
“We will keep this momentum,” he said.
“I am a senior official of the finance ministry. It is my responsibility to clarify the real situation of the economy,” he said, adding that he has been with the ministry since 2002, and now has more than 15 years’ experience involvement in the government budget.