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Friday, November 1, 2013

DAP laments a “GST Deepavali”, says more will pay tax

OCTOBER 31, 2013

This is a "GST Deepavali" for Hindus and all other Malaysians who will be paying more taxes without any prospect of wiping out corruption or improved government services, said the DAP Party secretary-general Lim Guan Eng said the people wanted justice, freedom, democracy, integrity and truth, as well as the burgeoning national debt and deficit to be addressed and not have new taxes imposed or subsidies for the poor scrapped without removing subsidies for the rich.

He said the 6% Goods and Services Tax (GST), which would replace the Sales and Services Tax (SST) come April 2015, would earn the government RM32 billion yearly instead of just RM16.4 billion but it also meant that the poor as well as 94% of the population, who did not pay tax, would be doing so for the first time.

"This also meant every Malaysian in the country's population of 27 million would be paying RM1,200 in GST," said the Bagan MP in his Deepavali message in Kuala Lumpur today.

"Finance Ministry secretary-general Mohd Irwan Serigar Abdullah admitted that the GST will earn the country a revenue of RM23.18 billion in the first nine months of its implementation and likely bring in RM32 billion for the full 2016 year. With the SST, the revenue is only at RM14.4 billion.

"In other words, with the GST the Federal government can double its revenue and as it applies to all 27 million Malaysians, it means the people will have to pay RM1,200 each on average."

Despite the projected increase in future revenue for the country, Lim, who is also Penang Chief Minister, remained concerned over Malaysia's growing deficit, which would be at RM541 billion at the end of this year compared to RM502 billion last year.

He also noted that rating agency Fitch Ratings was also maintaining a negative outlook on Malaysia even with Prime Minister Datuk Seri Najib Razak's announcement that the budget deficit for 2014 has been reduced from 4% to 3.5% of GDP.

He said the agency was "unimpressed" with the 2014 Budget and was having doubts about Putrajaya's commitment to reduce the federal budget deficit, after Petaling Jaya Utara MP Tony Pua pointed out that the government exceeded its forecast revenue by RM14.4 billion but still spent the extra money.

"Instead of lowering the projected budget deficit of 2013 from 4% to 2.6% of GDP, or the deficit from RM39 billion to RM26 billion, it still remained the same at RM39 billion.

"Clearly, the government is not serious about reducing the budget deficit when it wastes extra money received on white elephant projects like the RM5 billion, 100-storey Menara Warisan or refuse to take action on the wrongdoings exposed by the 2012 Auditor General Report amounting to RM6.5 billion."

Lim also questioned why Putrajaya removed sugar subsidies that benefitted the poor, which would only save RM513 million yearly, but did not cut the gas subsidies enjoyed by Independent Power Producers (IPPs) that cost up to RM12 billion annually.

"Why talk about cutting down spending when the government’s national debt continues to rise?" he said in his statement. – October 31, 2013.

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