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Thursday, January 2, 2014

PKR questions 'GST will lower prices' claim, says it's BN propoganda tactic

Politics & Government 2013
Written by Azril Annuar, (contributor to 
Monday, 30 December 2013 14:17
Last Updated: 1:34pm, Dec 30, 2013

PETALING JAYA (Dec 30): PKR has called Deputy Finance Minister Datuk Ahmad Maslan out over the latter’s statement that the implementation of the Goods and Services Tax (GST) will bring prices down.

Party stragy chief Rafizi Ramli said Ahmad’s view of the whole scenario was simplistic as it was based on the assumption that businesses can reclaim tax credit and would voluntarily lower prices.

"Ahmad Maslan’s statement was based on the goodwill of businesses to bring down the price voluntarily.

"However, in the draft text of the GST 2009 Bill given to the MPs, there is no clause or section that demands businesses to lower their price," Rafizi told a press conference today.

Rafizi added that because GST goes across the board, companies will still have to raise the price as their own overhead (electricity and water) will also increase.

"The Barisan Nasional attitude on this is the same as when they hoped that the car manufacturers will lower their price without abolishing excise tax. Till now the price of cars has not gone down but has actually increased," he said.

The Pandan MP claimed that this was one of BN’s propaganda tactics to distract the consumers and the public from the real scenario.

"BN knows it’s going to go up… Ahmad Maslan and BN know that when you implement GST, prices will inevitably go up. They know that, because prices go up, unfair business to reduce prices even though they claim input GST. My point to BN is to stop misleading the public.

"Stop telling people that the mechanism of this tax will help reduce prices. This is meant to mislead the public so that when prices do go up, the public will turn their anger to the business instead of BN. However, BN is the one who implemented the GST when the nation isn’t ready," said Rafizi.

Ahmad was reported to have said on Dec 22 that the opposition was spreading lies over the introduction of the GST on April 1, 2015.

The deputy minister had claimed that the opposition opposed GST because when prices of goods and services fall, they won't have a reson to attack the government.

Rafizi clarified that PKR isn’t against GST as a tax collecting mechanism, and welcomed the implementation of the tax provided that the nation is ready.

"Other countries who have implemented GST have a strong economy where most of the nation’s workers pay income tax. Here only 11% of our workers pay income tax. Thus the GST will affect 89% of those who should not have been affected.

"In other countries when they implement GST, the total tax collection of say maybe RM80 billion remains the same. It’s just the collection mechanism that has changed. Perhaps from the collection from 25% income tax was reduced to 20% and the 5% balance collection mechanism that has changed. Perhaps from the collection from 25% income tax was reduced to 20% and the 5% balance was taken from the GST.

"Here, it will cause a price increase and it is proven that the moment a country implements GST, there is a 2-3% inflation, some nations as high as 8%," said Rafizi.

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