Jala Calls on Political Parties to Deal with GST Together

PREMALATHA JAYARAMAN sunbiz@thesundaily.com

KUALA LUMPUR (March 28, 2012): Minister in the Prime Minister's Department Senator Datuk Seri Idris Jala calls on political parties to put aside their differences and come together to discuss the broad-based consumption tax on goods and services (GST), which will bring additional revenue for the country.

Jala, who is also the CEO of Performance Management and Delivery Unit (Pemandu), said both sides should sit down together to ensure that they agree on the Goods and Services Tax (GST).

If the GST is implemented, he said, Malaysia can generate additional revenue to pay its debt and invest in the future.

He was speaking to reporters after delivering a lecture on "Economic Transformation Programme Update" organised by The Malaysian Institute of Certified Public Accountants (MICPA) yesterday.

"In my view we must introduce GST. In Malaysia, out of the 28 million people, only 1.7 million people are paying tax. We are relying on the 1.7 million people that carry the burden. When we have consumption tax, which is the GST, it means we spread the burden across," he said.

Jala said it is also an opportunity to reduce the corporate tax and enable companies to become more competitive.

"We can also help reduce personal income tax. That's why most countries have gone down the path," he said, noting that 143 countries have already implemented GST.

Jala said GST will have a positive impact on the country's fiscal position. He said if the GST is 4%, the country will be able to achieve a revenue of RM6.3 billion in two years. At 5%, the revenue will be RM9.7 billion in two years while at 7%, it will be able to register RM25.7 billion in two years.

However, he said there is a need for the public to understand GST and its effect on the country.

"In fact, many countries that have implemented GST make staple items such as rice non-GST. I think education is the key in creating greater awareness," he said.

Jala said Malaysia is also on track to achieve the per capita Gross National Income (GNI) of US$15,000 (RM48,000) by 2020. The per capita GNI currently stands at US$9,400.