During an interview with Bloomberg’s Haslinda Amin at the Milken Institute 10th Annual Asia Summit, Anwar admitted that the GST is the most efficient and transparent tax system.
“When do we implement it? It depends on the threshold. When people are living in abject poverty, you have to introduce progressive tax policies, but not a broad-based policy that affects the very poor.
“You have to give some time, but then do you do nothing? No. You have to broaden the tax base, for sure, but you have to first reduce subsidies to the rich,” he said.
Anwar said subsidy rationalisation would not be a popular decision but the government has four years before the next general election.
Hence, he said the government has to rationalise as soon as possible because Malaysia has some of the highest subsidies in Asia.
He added that Malaysia is focusing on clarity in its policies to ensure it can attract investments as it successfully did in the 1990s.
“We have a good team and we have to accept the fact that we need investments. There must be ease of doing business. There must be clarity in the economic policies.
“We have issues in inequality, we have people in the hinterland including Sabah and Sarawak, and some in Peninsular Malaysia. We have to address this issue.
“We have been able to attract major investments in the past five to six months from China, the US and Europe.
“The largest is from Infineon Technologies, €5 billion into Malaysia. This would be of immense help to boost the confidence,” Anwar said.
The prime minister said Tesla had decided to open its Malaysian headquarters here by the end of October or early November this year.
He said there are three local Malaysian companies working with SpaceX, adding that Starlink has something that will benefit Malaysia immensely.
Anwar said Malaysia is expected to see a greater increase in digital transformation, energy transformation and renewable energy.
“On investment tax, it has to be attractive for investments… whatever needs to be done, whatever is necessary to ensure that Malaysia remains as an attractive competitive destination for investments,” he added.