Putrajaya tables controversial GST Bill

BY PATHMA SUBRAMANIAM
MARCH 31, 2014

Participants of an anti-GST rally holding banners in front of
Parliament before the tabling of Budget 2014 in Kuala Lumpur
in this picture dated October 25, 2013. — Picture by Saw Siow Feng

KUALA LUMPUR, March 31 ― After a six-year hiatus, Putrajaya finally tabled the Goods and Services Tax (GST) Bill today, and announced its intention to ensure the highly-criticised new consumption tax system gets Parliament’s nod during the current sitting.

Prime Minister Datuk Seri Najib Razak had announced during his Budget 2014 speech last October on plans to implement the GST at a starting six per cent rate beginning April 1, 2015, as his government seeks to rein in spending and tackle its chronic budget deficit.

The GST was originally planned during Budget 2005 by former prime minister Tun Abdullah Ahmad Badawi and scheduled to be implemented in 2007 before it was deferred.

The Barisan Nasional (BN) government, shortly after Najib took over, had tabled it for first reading in 2009 but it was again shelved following stern opposition against the move.

The GST is a consumption tax, meaning all Malaysians will be taxed according to their level of spending, regardless of income. This differs from income tax that is only applicable after a certain salary level is exceeded.

Detractors have argued that the broad-based tax is “regressive” and takes a larger percentage of income from those in the low-income groups than from high-income groups.

Malaysia currently charges 10 per cent sales tax for manufacturing and imports, and 6 per cent services tax especially for food and beverage.

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