World Bank lead economist for Malaysia Apurva Sanghi said studies showed the GST offered almost double the tax revenue compared to SST.

“More than 170 countries across the world have implemented some form of a value-added tax system similar to GST.

“One benefit of GST is the tax on consumption, which is useful when considering 60% of the economy depends on consumption,” Berita Harian quoted him as saying.

Sanghi said a tax system covering more sectors and industries was needed to prevent leakages or tax evasion, adding that such a system would increase government revenue.

However, he noted that the previous implementation of the GST had disadvantages and was regressive in nature. He said lower-income groups tended to bear the worst of the taxation.

He said the government must spend on assisting or providing subsidies to the lower-income group if it were to reintroduce the GST.

A 6% GST was introduced in 2015 but was abolished when Pakatan Harapan took over the federal government and replaced it with the current SST system in 2018.

In an interview with Nikkei Asia in Tokyo in May, Prime Minister Ismail Sabri Yaakob said the government was not ruling out the possibility of reinstating the consumption tax as an effective way to increase national income and help combat inflation and the rising cost of living.