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Thursday, November 7, 2013

Many harp on about Budget without studying it

Publication: NST
Date of publication: Nov 6, 2013
Section heading: Main Section
Page number: 018
Byline / Author: By Datuk Huan Cheng Guan

THE bigger democratic space we have on the Net has seen the insidious growth of negative commentaries, especially from those who express their opinions for the sheer pleasure of seeing their opinions published in social media platforms or online sites. Many rant from selfish or narcissistic inclinations that usually have malicious intent. How much of what we read is genuine and reliable? The perspectives and expressions of many are warped, untrue and distorted.

Realistically, we have a prime minister who listens, cares and walks the extra mile to keep promises. On Aug 23, he invited the people (via Twitter) to share their views about the 2014 Budget. He promised to forward views shared to the Finance Ministry for further action. The main concerns expressed revolved around the high cost of living and the lack of affordable housing.

Changes announced in the Budget, such as the removal of sugar subsidy, implementation of the Good Services Tax (GST) and controls on excessive property speculation, are intended to reduce our fiscal deficit and prosper the nation to maintain economic growth to promote the wellbeing of citizens.

Unfortunately, the opposition, activists and many Malaysians have been harping on the wrong end of the stick and chose to focus on the withdrawal of the sugar subsidy and the April 2015 implementation of GSTwithout studying the Budget in detail.

Why is there so much furore when there is a 17-month gap from now until April 2015 when the GST will be implemented? The proposed six per cent rate is the lowest in the region (10 per cent in Indonesia, Vietnam, Cambodia and Laos and seven per cent in Singapore and Thailand).

Actually, the GST automatically taxes the well-off segment of the population as they consume more. In this way, the lower-income group will not be burdened.

Unfortunately, the opposition has ignored the government's decision not to impose GST on basic food items such as rice, salt, sugar, water and the first 200 units of electricity. Doesn't this move show the government's commitment to spare the poor from being burdened by the GST?

Why have many chosen not to elaborate on the Finance Ministry's decision not to impose GST on passports, licenses, health services and travel? Not many know the RM300 one-off assistance to households of 1Malaysia People's Aid (BRIM) recipients. The compensatory move of lowering individual and corporate income tax aims to alleviate the middle- income squeeze and to make GST more acceptable to middle-income earners.

The opposition has refused to acknowledge that the implementation of the GST will make consumers more prudent in their spending.

GST is certainly a more efficient tax system than the current framework as it can strengthen the fiscal position of the nation. Don't forget the following:

TAX rate for essential goods, such as mentioned earlier, and public transport will be set at zero;

THE current sales tax, as well as the service tax of six to 10 per cent, will be repealed once GST is implemented;

GST will be revenue neutral for the government because gains will be offset due to the termination of the sales and service tax;

MANUFACTURERS are entitled to claim a rebate in the tax to the value that their suppliers added only if proper and complete records are kept; and,

GST will make it more difficult to evade taxes because complete records are necessary at each stage of the taxation process for businesses.

Datuk Huan Cheng Guan,
President Malaysia Sensible & Ethical Malaysian United Team (SEMUT)

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