GST: Rakyat bails out government
Selena Tay, FMT
Prime Minister Najib Tun Razak has recently mentioned that GST (Goods and Services Tax) was a more equitable taxation system and the additional revenue would allow the government to finance future developments.
He also said that the current taxation system was not efficient as only 1.34 million workers out of 14 million workers paid income tax.
This was reported in an English local daily dated Nov 28, 2013.
His statement regarding the number of taxpayers is downright silly. The small number of workers paying income tax is because many workers are not taxable as they are low-wage earners. This shows how much he knows about economics.
He is just simply trying to rally the people to getting round to accepting GST because before this he was saying that Malaysia’s economy was robust and resilient. He even pointed to Moody’s encouraging upgrade in rating for Malaysia from ‘stable’ to ‘positive’.
As mentioned in a previous article by this columnist, most people preferred the GST to start at 3% or even 4% the most as 4% was the figure touted before the 13th general election. After the polls, 7% was the rate proposed by the government.
Is the final figure of 6% a sort of psychological mind game by the government to show that they are ‘caring enough’ to reduce the rate by 1%?
Singapore started their GST implementation at 3% on April 1, 1994 and it stands at 7% now. Great Britain started implementing VAT (Value Added Tax) on April 1, 1973 and currently it stands at 20% – this is okay as it is 20% after four decades.
Some analysts opine that GST in Malaysia could reach 10% by 2020. If it is true, then it is ridiculous. Why such a quick and steep increase? One has to take note that GST will be implemented on April 1, 2015 and if there is any increase in 2020, it should only go up by 1% to 7%.
A quick and substantial increase can only mean one thing – that the BN government is in a dire financial state and they also know that the rakyat will realise this if GST is implemented before GE13. Otherwise, why not implement GST in 2011 or 2012? This shows that the government, knowing that the GST will be unpopular was merely holding on to its implementation until after GE13.
