No point in collecting more taxes if the taxpayers’ money is eventually squandered due to corruption, leakage and cronyism.
- The poor and low and middle-income families pay more GST as a proportion of their income than their richer counterparts
- Economic situation of Malaysian households isn’t doing well enough to pay a flat rate consumption tax
- Reintroduction of GST will lead to a sharp leap in prices of goods
DAP deputy secretary-general Liew Chin Tong said today that the government’s proposal to bring back the goods and services tax (GST) amid a global inflation was “madness”.
“GST is regressive and a tax that kills the golden goose of consumption. The poor and low and middle-income families pay more GST as a proportion of their income than their richer counterparts,” the Johor DAP chairman said on Facebook today.
Liew, who is also Perling assemblyman, called GST “the wrong cure for the wrong problem,” saying that the economic situation of Malaysian households isn’t doing well enough to pay a flat rate consumption tax.
According to him, only 16.5 percent of Malaysians pay income tax, while 60 percent are considered poor.
“GST is the tax that punishes the poor, kills consumption at all levels, and doesn’t increase government revenue, and doesn’t benefit the overall economy,” he said.
Liew alleged that former prime minister Datuk Seri Najib Razak is the mastermind behind the push for the GST, adding that the latter appeared to be playing a similar hand that led to his predecessor Tun Abdullah Ahmad Badawi’s loss during the 2008 elections that was partly attributed to a 40 percent petrol hike at the time.
“Who advised Abdullah to do what he did? The chief advocate in the Cabinet was Abdullah’s deputy Najib Razak. Who benefited from the collapse of the Abdullah premiership after the fuel hike decision? Najib Razak.
“Who succeeded Abdullah as prime minister on April 3, 2009? Najib Razak. Now, who is screaming: bring back the GST? Najib Razak,” Liew said.
He said instead of the GST and other consumption taxes, there should be an economic restructuring of the country so that more Malaysians can have better jobs and be eligible to pay direct income tax, which would give the overall economy a better advantage in the long run.
Earlier today, Opposition coalition Pakatan Harapan also released a statement strongly opposing the reimplementation of the GST.
It reminded the government that the majority of Malaysians had rejected GST, as shown in the 2018 general election.
“The Pakatan Harapan presidential council does not agree with the proposal by Prime Minister Ismail Sabri Yaakob to reintroduce GST. Under a circumstance of escalating inflation, the people are particularly affected by the rising cost as well as decreasing household income due to the (economic fallout of) the Covid-19 pandemic.”
“The reintroduction of GST will lead to a sharp leap in prices of goods. This will cause tremendous pressure on the people if they also face a stagnant wage coupled with the supply chain issues,” it said.
Harapan said it was inappropriate for the government to think of collecting more taxes from the people when it had not rectified governance issues following the 1MDB scandal.
“It is unreasonable for the government to intend to collect more taxes from the people without first proving that the reforms and improvement in the governance have been successfully implemented.
“There is no point in collecting more taxes if the taxpayers’ money is eventually squandered due to corruption, leakage and cronyism,” it said.
In a recent interview with Nikkei Asia, Ismail Sabri said the government was keen on reintroducing GST.
He, however, noted the government was aware of the GST’s unpopularity but had limited options, noting it had lost RM20 billion in annual revenue after the tax was abolished.
The prime minister said the government would target a GST rate that would not burden the people but is not so low that it “defeats the purpose of expanding tax revenue”.