Posted on 25 October 2013 - 10:15pm
Last updated on 26 October 2013 - 12:43pm
KUALA LUMPUR (Oct 25, 2013): The highlight of the 2014 Budget - the Goods and Services Tax (GST) - was lauded by Nasional MPs with opposition lawmakers roundly criticising it as an added burden for the poor when introduced in April 2015.
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the GST, to be introduced at a rate of 6%, will not affect essential food items such as rice, sugar and salt, adding that the government has also implemented other measures that will help the people at large.
"I am confident that the (implementation of GST) would not burden the rakyat (people). There are already 100 countries exercising GST including developed and developing nations. This tax will also balance the selling price between West and East Malaysia,'" Husni when met by journalists outside the Parliament lobby.
"Thus, it will improve the living standards for people in Sabah and Sarawak," he added.
International Trade and Industry Minister Datuk Seri Mustapha Mohamad said the budget is "balanced" and will go a long way in providing benefits not only for the business community but also the average citizen.
"The measures reflect the government's commitment to reduce the effect of the rising cost of living on the low-income group," he said.
Home Minister Datuk Seri Ahmad Zahid Hamidi said the 6% GST rate is reasonable compared to the rate imposed in neighbouring countries.
He was also happy that his ministry was given an allocation of RM12.4 billion for operational and recruitment of manpower especially for the police force to help fight crime.
Human Resource Minister Datuk Seri Richard Riot said with the GST, the price of goods in Sabah and Sarawak will be the same as the peninsula.
Minister in the Prime Minister's Department Nancy Shukri said the government has given attention to all sectors, proving that the government "listens to the people's needs.'
"We can see that this budget is a balanced and a brave budget. It is not a populist budget. Hence whilst some sectors are charged tax but others who are genuinely in need are given assistance.
"This economic transformation budget is one way to encourage people to be cautious with their spending, at the same time, the government will be able to strike a balanced budget for the nation.
"At initial stage, the people might have to 'experience' a new economic approach but eventually, they will 'see' the fruit of their sacrifices," she said.
Opposition leader Datuk Seri Anwar Ibrahim criticised the budget by saying that vital areas such as wastage and leakages have not been addressed.
"Our contention is that before you talk about new tax measures including GST, which can be rationalised in terms of an efficient tax system, you must avoid the leakages first amounting to billion.
"You punish the rakyat for your irresponsible spending because of an irresponsible fiscal policy and you punish the people, because GST means transferring the entire pressure to the masses," said Anwar.
PAS treasurer Hatta Ramli said he doesn't see the rational of the one-off RM300 payment and reduction of income tax as an argument to offset the GST.
"If everything is offset, why do you have to introduce something. The implementation of GST involves a lot of money and training.
"If the impact of GST is offset, are you saying that the government is not going to get anything extra? There will be an effect on the people," he said.
Hatta added that the rich will pay less tax as the corporate tax has also been brought down.
"You cannot escape this tax, you have to pay, the poorer people are helping to offset the rich," he said.
Penang chief minister Lim Guan Eng said the opposition is very disappointed that there are no concrete measures to fight corruption.
"Najib talks about the fourth best shopping haven but what about Malaysia being the world champion of corruption? Why are there no measures to fight corruption?
"This budget doesn't address these issues. We have been waiting for announcements like making the Malaysian Anti-Corruption Commission (MACC) independent, but nothing of that sort.
"GST has actually only increased the burden of the poor and the middle class. In Malaysia only 6% of the population pay tax and only 15% of the population pays tax."