What removal of GST might mean for Malaysia's economy

(May 15): Malaysia’s intention to scrap a 6% goods-and-services tax within 100 days of Prime Minister Mahathir Mohamad taking office has economists and budget analysts on edge about the ripple effects.

Critics of the tax, including Mahathir, say it has raised living costs and that a more modest sales-and-services levy would provide enough government revenue alongside efforts to cut wasteful spending and root out costly corruption.

Supporters of the goods-and-services tax point to how much more income it gave the government than the previous system, helping to underpin Malaysia’s credit rating and its reputation with foreign investors.

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