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Thursday, November 21, 2013

‘When the rich can fly off for shopping…’

| November 6, 2013

The rich will simply buy goods overseas and thus will not be paying the GST for products which they don't buy here, says Ipoh Timur MP Su Keong Siong.

KUALA LUMPUR: The rich can well afford to thumb their noses at the good and service tax (GST). All they have to do is hop on plane and go to London to buy handbags or to the United States to buy expensive rings.

Ipoh Timur MP Su Keong Siong told the Dewan Rakyat today that this means that they will not have to pay GST here.

Su said the poor will have to cough up the GST while the rich will be flaunting their expensive tax-free handbags.

The DAP man said that it was incorrect when certain quarters claim that those who spend more will be most affected by the GST. He then said that the GST will thus not be beneficial for the country.

The GST was announced by Prime Minister Najib Tun Razak during Budget 2014. It will be implemented in April 1, 2015 in place of the sales and services tax and is fixed at six percent.

Many opposition leaders have termed the tax as regressive, due to its disproportionate nature.

DAP publicity chief Tony Pua had said that the GST would benefit the rich at the expense of the poor due to its disproportionate taxing.

Pua said the tax would burden the low-wage group who were not eligible to pay tax as they would practically spend the full amount of monthly earnings without any savings.

“A person earning RM20,000 per month, on the other hand, may spend RM12,000 of his income while saving or investing the balance. He will pay five percent of his RM12,000 expenditure, which works out to RM600,” he said.

Pua explained that this meant that the wealthy would pay about three percent tax on his income, proving that the impact of the GST would be harsher on the poor than the rich.

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