“There were lobbying efforts made by wealthy tycoons to certain political parties since they did not want to pay more taxes,” he said at a webinar co-organised by the Bait Al-Amanah think tank and Z Consultation Group.

Isham brushed off critics of the GST implementation in 2015 who claimed the tax was regressive.

He said GST was, in fact, progressive as it prevented the wealthy from avoiding taxes.

“When you have a sales and services tax (SST), the wealthy can avoid paying taxes,” he said.

Isham said having GST in place would help instil confidence among foreign investors, who would feel assured that Malaysia would not resort to implementing other forms of taxes.

He said that when the Pakatan Harapan (PH) government abolished GST in 2019, foreign investors were worried about how the government would settle the RM1 trillion debt that had accumulated at the time.

“They were worried that the government might introduce other forms of taxes if the PH government did not have any plan to introduce a consumption tax,” he said.

The investors’ fear affected Malaysia, he said, making Indonesia and Vietnam more attractive to invest in.

Isham also said it would take political courage to reintroduce GST

“Even Dr Mahathir Mohamad considered reintroducing GST (in 2019), but I doubt he was serious about it due to political lobbying (from the wealthy) at the time,” he said.

‘Have an agreement to avoid politicising GST’

Bait Al-Amanah’s research director Benedict Weerasena called for a confidence and supply agreement (CSA) between the next government and the opposition to avoid politicising GST, should it be reintroduced after GE15.

“GST is good for national interests. So, if the opposition then plays with the public’s sentiments to oppose GST again, we will go back to square one.

“Strategy-wise, a CSA can be used as a mechanism for GST to be incorporated. We can fine-tune it during debates in Parliament,” he said.