KUALA LUMPUR :The Malaysian Institute of Economic Research (MIER) is urging the government to re-introduce the goods and services tax (GST) in the 2020 Budget at a lower rate of 3%.

MIER chairman Kamal Salih described GST as fair to everyone, adding that the tax regime had kept the government afloat when crude oil price declined to below US$36 per barrel in 2015.

“GST is a fair system, some people said it is regressive because the poor will be affected.

“But, we have exclusion clauses that will protect the lower income group or B40,” he told reporters today.

GST, introduced in April 2015 at 6%, was replaced with the sales and service tax (SST) on Sept 1, 2018.

Kamal said he had opposed the move to abolish the tax and replace it with SST.

“Because no matter how you expand the SST to different sectors or how the enforcement is done, it will still not be enough to fill the income that was produced by GST,” he added.

Meanwhile, Kamal said the forthcoming budget should also incorporate a stimulus package in order to move the economy forward.

“Otherwise, the economy is going to be stuck at a fiscal deficit of 3.4% of gross domestic product and the government will have to borrow more money,” he said.

With a new round of investment initiatives in the stimulus package, Kamal said the government would be able to draw as much as RM1 trillion in foreign investments into the country, equivalent to the current government’s debt.