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Wednesday, November 6, 2013

GST and middle class

Published: Monday November 4, 2013 MYT 12:00:00 AM 
Updated: Monday November 4, 2013 MYT 9:00:13 AM

IF you are from the middle class and checking out at a queue of any shopping mall in Puchong, you’ll find people of your kind stacking their trolleys with tins of sardines, savoury snacks, burgers, frankfurters, potato chips, confectionery, ice-cream and carbonated drinks.

The wealthier people are not interested in your processed sludge, preferring to fill their trolleys with the fresh stuff; the wholesome fish, meat, vegetables and fruits.

You see such customers among the high-paid execs, diplomats, retired government heads, well-heeled politicians and high-profile corporate figures.

At the other end are the often down-and-out people, who go for essentials like sugar, rice, coffee, tea, flour and various kinds of kitchen ingredients.

These are the hawkers and petty traders, the workshop mechanics and wiremen, the despatch and office boys, the office cleaners, the toll plaza collectors and the factory production workers.

Guess who are the ones to be paying the GST – or the bulk of it – on the things they buy? Ya, that’s right, you and the middle class trolley pushers.

I use the example of the Puchong suburbia because it has the extremes and the middle and it is the community I know better than others in this growing Klang Valley metropolis.

After many years of staying here, I have seen among the people their food habits have not changed.

The high-income people buy the GST-free food, the BR1M-aided low-income folks take the zero-tax items while the middle-income strugglers are the ones choosing the probable GST items on the supermart purchases.

The GST exemption, in other words, favours the wealthy and the poor.

It’s the same story all over again. The people in the middle, already finding it difficult to own affordable homes and getting adequate business assistance, are the ones likely to feel the GST pinch the most.

But don’t take my word for it. Whatever I am saying about the GST is essentially from my own shallow understanding of the issue, from what I’ve heard and read from the media.

I am neither an economics expert, analyst nor a financial commentator to pass any worthy judgment on the matter.

A survey needs to be done to see if the situation tallies with what I say here.

I’ve been hearing even opposition MPs have no objections to the GST, which is due to be enforced in 2015.

The GST, they say, is a superb tax because the more you spend the more taxes you have to pay.

However, while agreeing with the GST, they are also requesting for a broader base of goods to be exempted from the tax.

In the meantime, many people think the rich people are always trying to dodge paying taxes. So, they are hoping the GST will ascertain the wealthy will be accountable for the things they buy and the services they use.

So far, I think, we are doing rea-sonably well with our current system; perhaps, better than some countries that are currently going into the GST.

Should the tax changes come through, I truly hope Malaysians will become a more healthy and prudent group of consumers.

In other words, if customers do not feel an item is worth paying for, they can look for a less expensive item or just walk away.

Puchong, Selangor

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