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Friday, November 1, 2013

Beef up tax collection or GST won’t work, says Perkasa

OCTOBER 27, 2013
UPDATED: OCTOBER 27, 2013 03:22 PM
Customers leave with their groceries after shopping at a supermarket
in Kuala Lumpur August 28, 2013. — Reuters pic
KUALA LUMPUR, Oct 27 — Putrajaya must keep a keen eye on fraudulent businesses that attempt to weasel out of paying what is due to the government when the Goods and Services Tax (GST) is implemented in 2015, Perkasa said today.

The Malay rights NGO said tax collection will be a major structural challenge for the government, and any weakness among collecting agencies such as the Customs Department and Inland Revenue Board would negate whatever benefits that could be had from the new tax regime.

“When it comes to paying taxes, those in developed nations are usually more honest and will pay what they are taxed. The situation, however, is different in developing nations where many are looking for ways to evade paying tax,” said Perkasa supreme council member Admiral (r) Datuk Mat Rabi Abu Samah.

“The issue is how the government can ensure that all the taxes are paid to the government, and this means it needs to emphasise on an effective collection system,” he added.

Perkasa’s view on GST implementation echoes a point raised by PKR vice-president Nurul Izzah Anwar, who said that an efficient collection regime is needed for GST to work.

She said that GST is a very complex instrument to collect revenue for the government, and could lead to hikes in property prices and inflation if errant businesses are not roped in.

“If you’re not good at looking at errant businesses, how do you expect those in Kedah or Kelantan to know what their rights are? Not everyone has the capability. I hope they will have adequate staff to do this, because it’s going to be disastrous,” she said when met at the Berhad Investor Day here, yesterday.

Mat Rabi today described the GST as a fair taxation system that charges Malaysians according to their consumption.

He said whatever negative traits that come with the implementation of GST are outweighed by the positives as it broadens the country’s tax base to boost the government’s income without placing undue burden on the public.

“There are a lot of items that are GST free such as food items,” he said, referring to the exemption for basic food items and services when the tax system comes online in April 2015.

“The GST mostly covers luxury goods. It is a consumption tax so the more you spend, the more you pay. So a rich person will spend and pay the tax while the poor will simply reduce their spending,” he said, adding that the government needs to double its efforts to explain the entire system to the public before it is implemented.

Perkasa president Datuk Ibrahim Ali meanwhile said that critics of the government’s subsidy rationalisation plan and the GST are missing the point of the whole exercise.

He said the recent the decision to totally remove the sugar subsidy of 34 sen per kilogramme had less to do with cutting down on diabetes as mentioned by Prime Minister Datuk Seri Najib Razak, and more to do with sugar in big businesses.

“All this criticism about Datuk Seri Najib talking about diabetes... a man can’t even make a joke. Even that can become an issue. The thing is that a lot of sugar is used by big companies that make things like chocolates and sweets.

“If you really want to go on the case for prevention, then I would say the subsidy removal is like the introduction of the ISA. Both are for prevention,” he joked, referring to the now-repealed Internal Security Act that was used to detain hundreds of political dissidents in Ops Lalang in the 1980s.

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