PKR slams GST proposal

Samah Mariam | May 20, 2013

A PKR leader wants the government to eliminate dubious mega projects and corruption instead of introducing GST.

PETALING JAYA: PKR trade and investment bureau chief Wong Chen has called on the government to do away with unnecessary mega projects and corruption before introducing the Goods and Services Tax (GST).

Rebuking Minister in the Prime Minister’s Department Idris Jala for proposing a 7% GST, he said Malaysia can avert a major financial meltdown, if the government eliminates mega projects and weeds our corruption.

He said this in reaction to Idris’ statement recently that the government was mulling the implementation of the GST at 7%, similar to Singapore.

The minister also said the 7% rate would increase government revenue to about RM25 billion a year.

Wong, who is also Kelana Jaya MP, said the country’s economic woes was caused by a weak tax base, profligate spending and unabated corruption.

He said about 78% of the population fall under the non taxable category earning less than RM2,500 a year.

“Introduction of the GST would be an added burden to the people. It is not tax evasion. People just do not make enough money to pay tax,” he added.

On the argument that government would reduce corporate and income tax to facilitate the implementation of GST, Wong said this would only benefit the rich as the poor would end up paying more.

“In essence, the government’s GST plan is regressive in nature unless they can cut on excessive spending and corruption… BN has no right to introduce GST,” he added.

Wong said the 7% GST proposed by the government was too high and would in return spike the nation’s inflation.

“The minister’s figure is not the same as the Finance Ministry’s proposal which wanted 4% GST. In 1994, Singapore introduced GST at a low rate of 3%. It took them nine years to increase it to 4% in 2003 and subsequently to 7% in 2007,” he added.

“So if the minister loves the Singapore model so much, would he commit to a 3% GST rate for nine years if there is a real need to implement the new tax system?” he queried.

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