Date of publication: Nov 25, 2013
Section heading: Main Section
Page number: 002
Byline / Author: By Syed Umar Ariff
KUALA LUMPUR: TAX evasion is a treasonous act and tantamount to interfering with the country's development, Prime Minister Datuk Seri Najib Razak said yesterday.
Instead, Najib described paying taxes as patriotic, since the increased government revenue would then be used for infrastructure development and economic growth.
In explaining the implementation of the goods and services tax (GST), Najib said the act of paying taxes was in line with the definition of patriotism, which includes meeting responsibilities for the benefit of the nation.
"If we pay our taxes, it means that we are taking part in helping (to develop) the country and the rakyat as well.
"If we are not able to wield a weapon to defend the country in an act of patriotism, paying taxes (in fulfilling responsibilities as citizens) is also in the vein of patriotism.
"Otherwise, evading taxes is an act of treason," he said at the National Economic Empowerment seminar yesterday.
The GST was announced during the tabling of the 2014 Budget to replace the current sales and services tax, which is deemed inefficient.
Local and international economists have lauded Najib for charting a move towards fiscal consolidation.
Moody's Investor Services, the world's oldest ratings agency, had also raised its outlook on Malaysia from neutral to positive just weeks after the announcement.
Najib said in the pursuit of developed nation status, Malaysia could not afford to realise its ambitions without sustainable national revenue, adding that the country would not resort to seeking international loans to meet its national objectives, which was among the reasons why the GST would be introduced.
As only 10 per cent of the working population were taxpayers, Najib reiterated that the country needed to improve its financial strength by creating a new revenue source.
"The people are expecting a lot from us. Many demand better roads, more universities or more scholarships for students, for example. How do we cater to all of these demands when there are only 1.4 million taxpayers in the country?
"We have people who do not pay taxes and even tax evaders. (To mitigate this) this is why we are introducing the GST.
"(International rating bodies) see that we are brave enough to initiate fiscal consolidation. Although the move is not popular with some, this is for the betterment of the people."
At the same time, Najib assured the people that the GST would not put undue strain on their finances.
"Of course, there will be a price hike on goods. I want to be realistic here. I do not want to tell you otherwise. In fact, the price of goods have increased in every country which has implemented GST, but at a very minimal rate.
"In Malaysia, the prices (of goods) will only go up once, all at the same time, in 2015."
Najib also took a swipe at the opposition's views on the GST, saying that they have not been consistent with their comments.
"Some are against it but later made a U-turn and gave their approval, although they still disagree with theGST rate (which has been set at six per cent).
"Others say that we can only do it if all leakages are plugged. This comes from one who recently denied his claims that 40,000 Bangladeshis voted in the recent general election."
On another note, concerning the high electricity bill of the prime minister's official residence, Sri Perdana, which was questioned by the opposition, Najib said the matter was unavoidable since the premises was public property.
"I am just a temporary occupant. It does not belong to me. It is the prime minister's residence, which has a room for (special) functions.
"If a head of state is present, are we supposed to dine in the dark? When the Chinese president was here (not too long ago), do you want us to have a candlelight dinner? I would say that would be very romantic," he said to the laughter of the crowd.