Why GST was so unpopular in Malaysia

My Malaysian friend told me why GST was so unpopular in Malaysia that it caused Barisan Nasional to lose the general election.

To implement GST, each business has to implement a computer system that cost over RM 20,000. This is a very heavy expense for the business.

Although GST has now been removed, the business has already incurred this cost. It will take them a long time to recover their expenses.

There was another problem faced by the businesses in Malaysia. They had to pay GST to the government based on their sales. They can claim back the GST paid on their purchases. This claim was made separately. The tax authority was very slow in giving this refund. So, there business had to incur GST twice - first on their purchases and second on their sales. 

Yes, it was a big mess.

In the case of Singapore, the small businesses are exempt from GST. I do not know if the same exemption was given in Malaysia.

Although the small business in Singapore do not collect GST from their customer, they had already incurred their GST in their purchases and they cannot recover it back.

The actual prices that the small business had to charge the customer has a large component of GST inside it.

It is extremely complicated.


GST will continue to be a drag on the economy. It increased the cost of doing business and reduce consumer demand.


It is a stupid way to collect revenue for the government.