Dr M: GST is public’s bailout of Putrajaya’s misadventures

(Malay Mail Online) – The Goods and Services Tax (GST) is the government’s way of asking Malaysians, including those not even eligible to pay income tax, to help bail it out of its many financial missteps, Tun Dr Mahathir Mohamad said today.

The former prime minister, continuing his attacks on the Najib administration, said the additional funds raised by Putrajaya to broaden its tax revenue were at the expense of the people as the new consumption tax system affects everyone.

“They (the public) have to pay more for everything they buy, which means their purchasing power is reduced.

“In other words they have become poorer, in order to enrich the government,” he complained.

Dr Mahathir pointed out that even if the end product to consumers are not subjected to the GST, wholesalers who supply retailers their goods are charged the tax and will therefore have to increase their prices.

The retailers, in turn, have to recover the higher cost by charging more to customers, which then means that the bulk of the burden then falls on the shoulders of consumers, he added.

The government, Dr Mahathir said, can avoid imposing additional taxes on Malaysians by reducing its own cost.

Dr Mahathir, a long time critic of the Najib administration’s 1Malaysia People’s Aid (BR1M) initiative, again dismissed the idea of cash handouts, saying it would be far better to educate and train the public to ready them for higher-paying jobs.

“Raising wages without increases in productivity, increasing the number of holidays, substituting those falling on weekends, fixing high minimum wages, wasting money on luxuries — all these increase Government expenditure, resulting in increased deficits.

“With better financial management the GST need not be imposed on the people,” he said.

The country’s longest serving prime minister has in recent weeks repeatedly and publicly criticised Prime Minister Datuk Seri Najib Razak and his administration’s policies over issues such as the BR1M handout to the lower-income group and the debt-laden state-linked firm 1Malaysia Development Berhad (1MDB).

Dr Mahathir has also called on the federal government to postpone the implementation of GST.

On Wednesday, Najib countered Dr Mahathir’s criticism of the GST, pointing out that the latter’s opinion differs from those of credible economists.

“He is opposed to the implementation of GST, although all credible economists believe that broadening our tax base is the right thing to do,” Najib wrote on his blog in the second part of his Frequently Asked Questions (FAQ) section, referring to Dr Mahathir.

“The revenue will be used for the welfare of the rakyat. Indeed, the idea was first mooted during his administration,” he added.

Najib also stressed that as the prime minister, he has the responsibility to make the right but difficult decisions for all Malaysians, such as implementing GST.