A notice announcing GST tax is displayed on the shelves of a supermarket in Kuala Lumpur on Apr 1, 2015 (Photo: AFP)
 
Kuala Lumpur (VNA) - The Malaysian government of new Prime Minister Mahathir Mohamad, who pledged to abolish the Goods and Services Tax (GST) during the election campaign, has announced that the rate will be cut from 6 percent to zero percent from June 1.

In a statement released on May 16, the Malaysian Ministry of Finance said the change goes into effect nationwide and will remain until further notice. It also requested all registered traders to abide the zero-rating directive.

At the same time, registered traders are also subjected to all current regulations, among which involve the issuance of tax invoices, submission of tax returns within the specified period and input tax credit claims, the ministry said.

PM Mahathir, who won the general election last week, had promised during the campaign to remove the 6-percent GST, which was implemented on April 1, 2015 under PM Najib Razak, to address the rising living costs.

In January, then PM Najib said the GST contributed over 44 billion ringgit (around 10.5 billion USD) to Malaysia’s budget.

The figures in 2015 and 2016 were 27 billion ringgit and 41.2 billion ringgit, making up 12.3 percent and 19.4 percent of the country’s total budget, respectively.-VNA