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Friday, November 1, 2013

GST: A heavy blow to poor, low income group, says Azmin

Posted on 25 October 2013 - 09:36pm
Last updated on 26 October 2013 - 11:47am
Soo Wern Jun

PETALING JAYA (Oct 25, 2013): A budget deficit reduction should not be done by extracting more money out of citizens, PKR deputy president Mohamed Azmin Ali said today.

He said the fundamental problem still concerned leakages, wastage and corruption.

"Without comprehensively dealing with these problems, we are looking at a bottomless pit. No amount of tax collected will solve the problem," he said.

Earlier today, the Prime Minister Datuk Seri Najib Abdul Razak announced a 6% GST implementation will be effective in 2015 and will replace the sales and service tax (SST).

Azmin however stated that the implementation of GST will be a heavy blow to the poor and low income group.

"Starting at 6%, it is exorbitant. Comparing to Singapore's GST at the current rate of 7% is also misleading because when it was introduced in 1994, it was only 3%," he said adding that Singapore introduced GST 13 years ago.

He said it was pointless to compare Malaysia's GST rate to Singapore and Europe as these countries have a better governance level.

"The cost of living in Malaysia is already high even without GST. With this tax now, a heavier burden is placed on the poor since they have little choice but to spend most of their disposable income," he said.

He also criticised the Prime Minister's argument that GST will cause many goods and services to actually cost less alleging that this was a serious misrepresentation.

"They will not be able to leverage on the GST with greater savings and investments unlike the rich and higher income group. This will create greater inequality and cause further social injustice," he said.

Azmin pointed out that this is a 'rich man's budget' because the government feels that it no longer "owes" the people.

"They held back the GST because they knew of opposition from the people. Now that the elections are over, it's a different story altogether. So, the poor are set to become poorer," he said referring that cumulative inflationary pressure and increases in cost of living standards will occur.

Azmin noted that emphasis on tourism with building of more 5-star hotels and vying with the world to have the best cities has little resonance with the people.

"Efforts should have been channelled to bring down transportation costs while healthcare had also been neglected," he said.

Offering the entrepreneurial fund through soft loans to ease employment among graduates will only lead to greater indebtedness, Azmin said.

He stated that the graduates need more soft skills training in vocational and technical areas to enhance their employability.

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