`Misconceptions create fear'

Publication: NST

Date of publication: Nov 15, 2013

Section heading: Business Times

Page number: 016

KUALA LUMPUR: Misconceptions and wrong information about how the goods and services tax (GST) can affect consumers has created an environment of resistance and fear.

"There has been a lot of misconceptions and wrong information about the GST ever since it came into the public domain in 2005 or so. Now that it is already in the works, there are even more misinformed talk about the 'harm' that it can inflict, creating an environment of fear among the masses," said chief executive officer of Federation of Malaysian Consumers Associations (Fomca), Datuk Paul Selva Raj during the Business Times Insight series on Goods and Services Tax: Are Malaysians Ready?

"Fomca did a series of surveys across nine focus groups with different ethnic, age profiles and even political affiliations, and the findings were unanimous: People do not understand GST, but they are dead set against it," he said.

He said the problem does not lie only in the lack of communication and understanding of the GST, but also in lack of confidence in the government at large.

"Let's be frank, nobody likes tax. Though the GST is not a new tax but a replacement of the existing tax, it is still a tax and there will always be resistance towards any kinds of tax. People will always assume the worst when it comes to tax. It also doesn't help that there have been too many negative reports about government expenditures."

He drew on recent instances when the public was promised better public transportation on the back of petrol rationalisation; a promise that was unfortunately undelivered.

"When you ask people to make sacrifices to their lifestyle as prices will go up, you need to gain their confidence and trust for their support.

"When you ask them to contribute more, they need to know whether the contribution will benefit them in the long run. Will they reap the benefits of the GST and will their quality of life improve on the back of this? That, of course, remains unknown."

Selva Raj stressed that the government needs to be on the ground more and engage with the general public in order to alleviate their fears of the GST and draw confidence.