Trade union says Putrajaya must withdraw GST, warns of further burden on poor

BY HASBULLAH AWANG CHIK

OCTOBER 29, 2013

MTUC's Khalid Atan says Putrajaya is already unable to control prices of essential items.
- The Malaysian Insider pic, October 29, 2013.

An influential trade union today urged the government to withdraw its plan to implement the Goods and Services Tax (GST) as announced in last Friday's Budget 2014 speech, saying it would further burden the poor.

Malaysian Trades Union Congress (MTUC) warned that the new tax would burden the public, and said low and middle income groups will be most affected unless Putrajaya could assure that prices of goods and services will not increase.

"What is the government's assurance that the GST will not be a burden to the public?" asked MTUC president Mohd Khalid Atan in comments to The Malaysian Insider today.

"Although the government has said that essential items would not be taxed, the price of vegetables and fish has already gone up several times," he added.

Khalid said the government was already helpless in controlling prices of essential items.

"The cost of living, especially in the city, has soared to unprecedented levels. What will happen when the GST is implemented?

"Can the government ensure that the prices of goods and services will not go up again?"

Khalid explained that the GST would have an impact on the public as it taxes the manufacturer, wholesaler and retailer before reaching the end consumer.

He said workers would be further burdened when prices of essential items take the brunt of the new tax.

Prime Minister Datuk Seri Najib Razak, presenting his 2014 Budget last week, announced that the GST, at the rate of 6%, would be implemented from April 1, 2015. Najib had also said the move would not result in price increase of essential items as these are exempted from the GST.

"Even if Prime Minister Datuk Seri Najib Razak claims that there will be no price increase once the GST is introduced, but sugar and fuel subsidies have already been slashed," Khalid said.

"So if the government starts increasing the prices of essential items, what will happen to the workers? Those who earn RM900 and below a month comprise 40% of Malaysia's workforce."

Khalid said while MTUC understood the need to reduce fiscal deficit, it should not be at the expense of low income workers and their families.

"Putrajaya must stop the implementation of the GST and stop comparing Malaysia with other countries as an rhetoric for introducing this tax," he said.

He argued that the economic landscape in Malaysia was different "as other countries which practise GST will return various other benefits to its people".

"We know the GST will burden the public. Therefore we urge the government not to implement it. Don't compare Malaysia with other countries as they give back benefits to the public," he said.

"What do we get back from the government in Malaysia? Is the aid given by Putrajaya sufficient to endure the suffering caused by a 6% GST? The answer is no.

"We are taxed every day with no exemptions. The government should think twice before implementing GST. MTUC is against GST as we don't see how it benefits the rakyat."