Some groups think GST is good, others do not think so

Published: Saturday October 26, 2013 MYT 12:00:00 AM 

Updated: Saturday October 26, 2013 MYT 7:18:39 AM

CONSUMER groups are split over the implementation of the Goods and Services Tax (GST) to replace both the sales and services taxes.

Describing it as “a step in the right direction” to tackle the country’s high debt, the Federation of Malaysian Consu­mers Association is supporting its implementation.

However, Fomca secretary-general Datuk Paul Selvaraj said the Government should ensure that measures were in place to prevent profiteering and to curb its impact on the poor.

“So long as the Government is able to implement safeguards, including monitoring prices and publishing prices of goods as a guide for consumers to compare prices, then the measure is good,” he said.

Selvaraj said Fomca also supported the move to lower individual income tax rates to increase the disposable income.

However, the Consumers Association of Penang (CAP) claimed that the GST was regressive.

“Even with the exemption of the GST for essential goods, the poor, who spend most of their income on food, will suffer,” said its president SM Mohamed Idris.

CAP, he said, was also against the lowering of income and corporate taxes, adding that it was not fair. “The affluent should be taxed more,” he said.

Malaysian Employers Federation council member Tan Sri Dr Mohd Noor Ismail said the reduction of individual tax rate would help retain talent in the country while a lower corporate tax would bring comfort to many employers, especially the small and medium-sized entreprises.

During the Budget 2014 announcement. Prime Minister Datuk Seri Najib Tun Razak said the special RM2,000 tax relief for those with monthly incomes of up to RM8,000 would result in tax savings of up to RM480.

To cope with the GST of 6% from 2015, Najib said income tax rates would be reduced by between 1% and 3%.