Budget 2014: Concern over GST and removal of sugar subsidy

Published: Saturday October 26, 2013 MYT 12:00:00 AM 

Updated: Saturday October 26, 2013 MYT 11:13:31 AM

THE foremost concerns of Malaysians following the Budget 2014 are the rise in sugar prices following the removal of its subsidy and the implementation of the Goods and Services Tax (GST).

With many saying that they are already struggling with the high living costs, they expect to further tighten their belts.

Insurance agent Jason Tan, 24, said daily life was already a struggle, especially for those who were just starting out in their careers.

“Although the price rise of sugar is only 34 sen per kilo, shops are going to increase the prices of their drinks by at least 10 sen per glass. Other prices will go up as well and the pinch will be felt by us,” he said.

Tan said he was also concerned about the implementation of GST, adding that he did not think that the exemption or reduction of income tax would bring much benefit.

The GST, fixed at 6%, is scheduled to be implemented on April 1, 2015, – 17 months from now – and will replace both the sales and services taxes.

At the same time, both the individual income and corporate tax rates are to be reduced by between 1% and 3%.

Lecturer Sudhashini Nair said she hoped that proposals spelt out under the Budget 2014 would help the lower and middle income group.

“The costs of living is so high now that we cannot even think of having more than one child,” she said.

PhD student Nithiya Arumugam, who returned from Japan three years ago, said the removal of the sugar subsidy would affect her the most.

“When I came back home, I was shocked by how much the food prices have increased. This is just going to make things worse,” she said.

Approving the Government’s move to set aside funds to improve the public transportation system, Nithiya said currently, the main focus was only the city centre.

“I hope to see the system extended and also for an increase in efficiency,” she said.

Engineer S. Kulendran said he was sceptical about GST, claiming that although many countries were alre­ady applying the system, they had high per capita income.

“They have reliable public transportation systems and affordable raw resources but we do not have that,” he said.

“The GST will affect the spending of the middle class and with lower salary increments, the situation will be worse,” he said.

Aircraft engineer Nazir Maslan felt that the removal of the sugar subsidy would impact the lower and middle income the most.

Nazir said he was hoping to see a positive result from the implementation of GST, adding that the 6% was a “reasonable amount” and “one of the lowest”.

“The only thing is that in countries like Britain, they pay more taxes but they also get back more. For example, the public transportation there is so good that it is a hassle to own cars.

“But I only see that happening here in the next 10 years,” he said.