Kota Kinabalu: Any move to reintroduce the Goods and Services Tax (GST) following the next General Election must be carried out properly, with a lower starting rate, full officer training and strict refund discipline, says the Liberal Democratic Party (LDP).
Its President Datuk Chin Su Phin (pic) said renewed public discussion on GST should be approached responsibly, based on lessons from the past rather than political convenience.
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“GST is not a new or unusual tax system. Many countries practise GST or value-added tax in one form or another.
“The real issue for Malaysia is not whether GST exists elsewhere, but whether we are capable of implementing it properly, fairly and competently,” he said in a statement, Monday.
Chin stressed that Malaysia’s previous experience with GST should serve as a clear warning, noting that the shortcomings encountered earlier were due to poor preparation, inadequate officer training and weak execution, rather than flaws in the GST framework itself.
“During the previous implementation, many enforcement and implementing officers were unfamiliar with procedures, inconsistent interpretation and unprepared to handle practical issues faced by businesses. This resulted in confusion, delays and unnecessary hardship for compliant taxpayers,” he said.
He said if GST is to be reconsidered, the Government must first ensure comprehensive nationwide training for all relevant agencies and officers, including those involved in enforcement, auditing and refund processing.
Clear standard operating procedures, uniform interpretation and clarity for the public must be in place before any implementation date is announced, he added.
Chin also said the design of the tax rate must be realistic and people-friendly.
“The previous mistake was starting GST at six per cent. If GST is to be reintroduced, it should begin at a lower and more manageable rate, such as three per cent, to allow businesses, consumers and enforcement systems to adapt without shock,” he said.
Another major concern highlighted was the refund mechanism, which Chin described as one of the most damaging failures of the previous GST regime.
He said while GST collections were centralised, businesses legally entitled to refunds faced prolonged delays, severely affecting cash flow and undermining confidence.
“This situation must never be repeated. When the Government collects tax continuously, it has a duty to return any amount legitimately owed immediately upon verification. Refunds are not incentives or favours, they are obligations,” he said.
Chin emphasised that delays caused by administrative bottlenecks, shifting fiscal priorities or inter-agency inefficiencies undermine trust in the tax system and penalise compliant taxpayers.
He also called for greater transparency and accountability in the management of GST revenue, saying clear institutional responsibility must be established to ensure refunds are not compromised.
“The Government cannot operate on a ‘collect first, resolve later’ mindset. Fiscal discipline applies not only to revenue collection, but also to repayment obligations,” he said.
The LDP reiterated that any proposal to reintroduce GST must come with clear implementation planning, lower introductory rates, full officer readiness, robust refund safeguards and transparent governance structures.
“If GST is to return, it must be done better than before. Otherwise, the people will once again pay the price for administrative shortcomings,” Chin said.
