Pakatan vows nationwide campaign to thwart GST rollout

BY IDA LIM

OCTOBER 17, 2013

Pua, Nurul Izzah and Dzulkifli spoke to the crowd numbering
more than 100 people at the Kuala Lumpur and Selangor
Chinese Assembly Hall. — Pictures by Choo Choy May

KUALA LUMPUR, Oct 17 — Pakatan Rakyat (PR) will go on a nationwide campaign to oppose the proposed Goods and Services Tax (GST) if it is announced by the government next Friday, DAP’s Tony Pua said.

Pua noted that PR’s first campaign in 2010 coupled with anticipation of a looming general election had “managed to convince the government to abandon” the GST, saying that the opposition pact would again try to delay the consumption-based tax that will allegedly make the poor suffer.

”We don’t know if we will succeed, but what we are planning to do, we will launch a ‘No To GST 2.0’ campaign. This will be the first of a series of forum to talk about GST,” the DAP publicity secretary said last night at a forum titled “GST - Cure or Addiction?”

”We will go round the country, we will try to increase the knowledge and understanding of the subject and hopefully there will be sufficient pressure for the government to think twice about implementing the GST immediately,” he added.

The GST Bill was tabled for the first reading in 2009 for implementation in late 2011, but was withdrawn during the second reading in 2010 following fierce public resistance.

Three years after the GST idea was set aside, economists and investment banks now predict that the tax will be reintroduced during the tabling of Budget 2014 in Parliament on October 25.

Putrajaya has itself dropped hints in recent months that Prime Minister Datuk Seri Najib Razak, who is also the country’s finance minister, will announce next Friday what economists describe as a long-awaited economic reform.

When met by reporters after the GST forum, Pua said the campaign will only be launched after the expected tabling of the proposal for the GST in Parliament.

Nurul Izzah argued that the GST was a 'regressive'
tax where the poor would be hardest hit with a higher percentage
of their earnings being taxed.

PR will then have a few months to spread the word on the GST Bill before it comes up for debate in Parliament, Pua said.

”I think the campaign is to bring awareness and to let them know whatever the government says about GST is not entirely accurate,” he said, with PR expected to use forums, ceramahs, websites and the social media to create greater awareness.

PKR vice-president Nurul Izzah Anwar and PAS’s Dr Dzulkefly Ahmad also spoke to the crowd numbering more than 100 people at the Kuala Lumpur and Selangor Chinese Assembly Hall (KLSCAH).

During the forum, both Nurul Izzah and Pua argued that the GST was a “regressive” tax where the poor would be hardest hit with a higher percentage of their earnings being taxed, while those with bigger salaries would see a lower portion of it being taxed. 

This was in contrast to the personal income tax where those earning more paid a higher amount, they said.

Dzulkefly said PR felt that the GST should not be carried out
until there is a rise in the people’s income level.

Dzulkefly said PR felt that the GST should not be carried out until there is a rise in the people’s income level, which he claimed had been “suppressed” due to the low wages paid to the foreign labourers in the country.

Pua also indicated that the GST scheme may require a bigger civil service to implement it, while business owners would also have to spend more on the new tax collection system.

Pua said he had submitted a question in Parliament on the extra cost that Putrajaya would have to incur for the GST, which would involve a complicated system of tax collection and refunds, as well as a list of tax-exempted goods.

”The cost of actually maintaining a civil service, a bureaucracy to run this may actually be more than the RM1.3 billion that we collect,” Pua said.

Earlier he had referred to previous government projections that it could collect RM13 billion in revenue based on a GST rate of three per cent, which would amount to a RM1.3 billion increase from the RM11.7 billion figure collected from the existing sales and services tax.

Pua said the campaign will only be launched after the expected
tabling of the proposal for the GST in Parliament.

If put into action, the GST will replace the existing sales tax of between five and 10 per cent and service tax of six per cent.

In July, Fitch lowered its outlook on Malaysia’s credit citing weaker appetite for reforms following a smaller Barisan Nasional win in Election 2013 and the country’s weak public finances.

The moved triggered Putrajaya to resume the subsidy cuts it suspended in 2010, when it raised pump prices for RON95 petrol and diesel by 20 sen per litre in September, although Fitch later insisted on more meaningful reforms such as the GST.

The GST is a consumption tax, meaning all Malaysians will be taxed according to their level of spending regardless of their income. This differs from income tax that is only applicable after a certain salary level is exceeded.

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