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Monday, November 25, 2013

Pelawan rep tells how GST robs the poor to help the rich

Posted on November 23, 2013, Saturday

GOODS and Services Tax (GST) was termed as “a regressive tax to rob the poor to help the rich” in the State Legislative Assembly yesterday.

David Wong (DAP-Pelawan) said the new tax – scheduled for implementation in April 2015 – would widen the government’s tax base while reducing the tax proportionately for the higher income group.

He alleged the government was misleading the people by saying GST “is for the benefit of all as it is the best tax structure in the world”.

“The actual truth is it is good for the (BN) government as there will be more people to feed them. The low and middle income groups are made to pay tax once GST is implemented.

“These groups of people do not have to pay income taxes before GST, and after GST, even the poorest among the people will be forced to pay tax,” he said when debating the Supply (2014) Bill, 2013.

Wong claimed the government had decided to introduce GST due to the increasing operating expenditure from RM14 billion in 2003 to RM26 billion in 2008, and which would be further hiked up to RM36.6 billion next year.

He said the government ought to practise prudent spending rather than asking the people to tighten their belts.

Under the present tax system, he said those earning RM3,000 and below were not expected to pay tax. However, with GST, this group would have to pay tax based on their consumption, save for some exempted items.

Citing as an example, he said if one consumed RM2,000 a month, one would have to pay RM120 for GST, which would come up to RM1,440 a year.

“On the other hand, those making RM30,000 per month, their consumption may be RM10,000 while they invest the rest of their income. Strictly speaking, only one-third of their incomes are taxed under GST.”

He went on to claim that 80 per cent or 5.2 million Malaysian households would be affected by the implementation of GST.

“That is how serious it is and why we oppose the implementation of GST in the first place.”

On the abolished subsidy for sugar, Wong asked why the government was still maintaining the commodity on the price control list.

Since the government had decided to stop subsidising sugar, he said it should let the price float to pave way for competition so as to bring down the price of sugar.

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