He said the GST previously imposed at 6% should be modified to a 5% tax on goods and a 7% tax on services.

“The government needs to look back at zero-tax items where this time it should only be limited to basic items,” he said during a programme on Bernama TV today.

Subromaniam said if the tax rate was set too low at 4%, it would only contribute to a neutral income, while a higher rate could increase the country’s income and finances, and boost the stock market.

“It will directly impact the strength of the ringgit against the US dollar,” he explained.

He also said the re-implementation of GST should take into account the appropriate timing, the strength of the ringgit as well as public policies provided by certain ministries besides ensuring that inflation could be controlled.

“There is no denying that the previous implementation of GST in 2015 had several weaknesses, such as subsidy reduction, rationalisation of electricity tariff rates and the depreciation of the ringgit, which caused the consumer price index to increase.

“Currently, the consumer price index is rising but it does not translate into more revenue for the government because the impact of SST only reaches the import and manufacturing levels for goods compared to GST, which impacts up to the retail level,” he said.

Subromaniam also suggested that the government not set the threshold value too low as before, which was RM500,000, so that small businesses would not be included in the implementation of GST.

“Maybe we can see a threshold value that is more suitable with a rate of between RM1 million and RM2 million so as not to burden businesses like a regular grocery store,” he said.

He said GST was an efficient, transparent and fair and business-friendly taxation system that could improve the country’s economy and provide better competitiveness to the country’s exports.

“GST will definitely stabilise the price of goods in the long run,” he added.