‘Buffoons’ making people paupers before GST

Selena Tay

| January 1, 2014

Pakatan Rakyat has largely kept silent and a low profile over the series of price hikes announced by the government in recent months.

Last Saturday, the Minister for Domestic Trade, Cooperatives and Consumerism, Hasan Malek was reported as saying: “We don’t control the prices, the consumer does”.

This is pure nonsense statement. Do we, the consumers, decide how much XYZ brand of soap will cost?

But then he is certainly not the first Barisan Nasional minister to talk rubbish.

It is obvious that the government administration is full of buffoons.

Currently the issue of price hikes is the hottest topic.

A street survey conducted by this columnist revealed that people are worried about the price of RON95 petrol increasing again in the very near future.

The manufacturers too are beginning to complain that the petrol and electricity hikes will make life difficult for them. Thus the production cost will be passed on to us, the consumers and our pockets will be under serious assault.

Can we refrain from buying things like detergent or soap? Even the cheapest brands on the shelf will see its price going up due to the increase in production costs.

All these increases are happening even before GST (Goods & Services Tax) is implemented.

And the Domestic Trade Minister has the gall to say that the consumers decide the pricing!

For the cronies, the year 2014 is going to be a very happy one as they will be reaping bountiful profits.

But for the ordinary citizens, especially the low-income group, it is going to be a tough year due to the endless price hikes.

What is already up as a result of the petrol and power hikes are prices of raw and cooked food, groceries.

Najib’s empty promises

It must be potentially crippling because even a former Prime Minister has said that price hikes should be carried out in stages.

Prime Minister Najib Razak’s grandiose plans of seeing the nation achieve its 2020 vision going bust is one thing, but now we the citizens are left holding the empty bag.

Now is the time to question Najib on his election promises.

What happened to his promise to reduce toll charges in stages? Is he a promise-keeper or a promise-breaker?

Price hikes aside, the Ringgit is also falling in value against the British Pound and the Singapore Dollar.

It is now RM5.40 for one pound sterling and over RM2.60 for one Singapore dollar.

Where are Najib’s economic advisers now?

Says Changkat Jering assemblyman Nizar Jamaluddin: “It is very obvious that Najib does not know anything about how to manage the nation’s finance and economics.

“Crime rate is also high and dengue fever has increased 100%. The nation is in shambles.

“Najib can say and spin what he likes but the truth of the matter is that his Government Transformation Plan (GTP) and Economic Transformation Plan (ETP) have gone bust.”

His colleague Khalid Samad, PAS’ Shah Alam MP concurs.

“The truth is the rakyat has been duped into voting for a group of evil professional hate-mongers who also double up as perception-creators and quack economists,” said Khalid.

Silent opposition

Nizar and Khalid’s observations aside, the opposition has kept largely quiet, with Pakatan Rakyat keeping a low profile.

Why is this so? Isn’t it time for the opposition to slam this price-hike tsunami as being too excessive?

The opposition must come out strongly to condemn these price hikes.

We have had successive price hike announcements post GE13.

First there was the petrol and diesel hike in September, followed by sugar in October, increase in assessment for the KL folks and then came the announcement of new electricity and toll rates.

The last three hikes comes into effect today.

Other anticipated hikes in 2014 could include Quit Rent, IWK sewerage charges, cooking gas, public transport, road tax and car insurance.

The government must stop making life more difficult for the average joe.

The BN government must put a stop to price hikes with immediate effect.

There should be no more price hikes starting from today and Malaysians from all walks of life must request that the government spend prudently.

Be warned of stormy days ahead.

Having said this, here’s wishing all readers and FMT staff Happy New Year and a good year ahead.

GST is payment for 'free dinners'

GUEST COLUMNISTS

Monday, 07 October 2013 admin-s

But if the government cannot cut expenditure because it has to give
 "free dinners" every five years, Woo quipped, then it is basically imposing
such taxes to make people "pay for their dinners" after the election is over.

Himanshu Bhatt, fz.com

Slowly but surely, across the nation the jitters are rising as the days inch closer towards Oct 25 – when the Prime Minister is expected to announce a new Goods and Services Tax (GST) while tabling Budget 2014.

Many quarters are of course very worried about the burden of double or multiple taxes with the introduction of such a tax. There are also concerns that businesses will increase their prices and thereby create a spiral inflation effect.

Certainly, the burden will be biggest on the poor.

According to a study by the Penang Institute, the GST is expected to raise RM7.5 billion from households alone.

Assuming that the tax rate would be 7%, each household would end up paying RM104 per month on average.

This is based on the latest Household Expenditure Survey which says that the average household pays 4.41% of expenditure or 2.6% of income.

But there are wider implications, including inflation spiking by 3.86%.

Whatever the rate is, there is going to be a secondary impact, the study shows.

Dr Lim Kim Hwa, a fellow with the institute and a fellow in Finance and Financial Reporting at the University of Cambridge, recently said that passing on costs to consumers is a very likely consequence of the GST.

"It's the secondary impact, where people start passing the amount by charging more," he told a forum on the GST organised by the Penang Institute here, recently.

"After the implementation of the GST we expect there will be a sustained period of high inflation."

One important element is commercial property, Lim pointed out.

While residential properties will not be subjected to GST, nothing has been said of commercial properties.

"And that has implications," he said. For example, when owners add GST to rentals, it would definitely increase the cost of doing business in Malaysia.

Read more at: http://www.fz.com/content/gst-payment-free-dinners

Majority of Malaysian businesses not GST-ready

Wednesday, 18 September 2013 admin-s

(The Sun Daily) - FMM said local businesses, especially the small and medium enterprises (SMEs), are still adjusting to higher costs of production following the introduction of the minimum wage, the minimum retirement age for private sector employees, increased Employees Provident Fund contributions beyond 55 years and rising costs of transport, including port charges.

As the push for the implementation of the much-awaited goods and services tax (GST) gathers pace, it is found that as low as 5% of Malaysian businesses are prepared for the consumption tax.

According to the Federation of Malaysian Manufacturers (FMM), local manufacturers are not preparing themselves for GST as the government is still evaluating the pros and cons and readiness of the population to accept the new tax regime.

"We understand that a number of companies do not have any allocation in their annual budget to prepare for the GST," FMM told SunBiz.

A survey by FMM in April 2012 to assess the readiness of businesses in implementing GST showed that over 60% of businesses that responded were not ready for GST. The remaining 40% indicated that they have made some preparations, such as attending seminars and training to familiarise themselves with the GST scheme.

However, the FMM survey noted that multinational corporations would have the least problems adopting GST as they can leverage on the expertise from their global network of offices.

FMM said local businesses, especially the small and medium enterprises (SMEs), are still adjusting to higher costs of production following the introduction of the minimum wage, the minimum retirement age for private sector employees, increased Employees Provident Fund contributions beyond 55 years and rising costs of transport, including port charges.

The federation is of the view that the GST implementation should be deferred as it imposes heavy tax administration burden on industries, in particular the SMEs.

Deloitte Malaysia country GST leader Tan Eng Yew (pix) told SunBiz most businesses are undecided whether to embark on any GST readiness exercise pending affirmative announcement by the government.

Tan observed that less than 5% of the businesses have started getting themselves ready.

He said GST preparation has wide-ranging implications requiring the involvement of people, processes and technology as all these components would be critical for businesses to be GST-ready.

Tan said top of the wish list of businesses is to allow a deduction of all GST implementation cost. Smaller businesses are also hoping that the government will provide free software to assist them to be GST-compliant.

What would be the appropriate GST rate to begin with?

Tan believes it should be 6% to justify a tax system revamp of this magnitude to replace the existing narrow-based service tax of 6% and sales tax of generally 10%.

When it was mooted in 2004, he said, the proposed GST rate was 4% but based on the Performance Management & Delivery Unit's simulation at 5%, it may generate additional revenue of up to RM8 billion.

"We anticipate the introduction of GST will be followed by a reduction in corporate and individual income tax rates, which would make our tax structure more competitive regionally," said Tan.

He added that export-oriented businesses will benefit tremendously since the GST system zero rates all exports of goods and services, thereby enhancing price competitiveness.

For the government, the wider base of GST ensures a fairer tax system.

Meanwhile, FMM said GST will not only add to the tax burden but will also lead to a manifold increase in the volume of administrative work.

"We do not see GST benefiting businesses in the manufacturing sector. We acknowledge that the government has to take steps to reduce the budget deficit. However, introducing GST to deal with the persistent budget deficit may not be the only way forward," it said.

"We are of the view that reducing wastages or leakages in government expenditure, ensuring better value for every ringgit spent and improving efficiency in utilising public funds to reduce the current deficit should be given priority over the introduction of GST, which would hurt the economy, especially given the weak external environment," it added.

The federation said, instead, the government must ensure that the export sector remains vibrant and competitive given the intense competition in global and regional markets.

It added that all forms of help should be given to Malaysian exporters and SMEs to achieve the required cost and productivity efficiency.

KPRU: Biar PETRONAS Lapor Kepada Parlimen Sebelum Laksana GST

Thursday, 05 September 2013 admin-s

 

Langkah ini bukan sahaja penting bagi mempertahankan kepentingan PETRONAS daripada terus dicekik oleh kerajaan dan terpaksa menyerahkan keuntungannya kepada kerajaan tanpa ketelusan, malah ia dapat menjawab persoalan mengapa harga petrol tidak diturunkan apabila harga minyak mentah pasaran antarabangsa mencatatkan penurunan.

KPRU

Pada 27 Ogos 2013 lalu, Petroliam Nasional Bhd (PETRONAS) mengumumkan bayaran dividen sejumlah RM27 bilion kepada kerajaan pada 2013, iaitu berkurang 3 bilion berbanding dengan RM30 bilion yang disumbangkan pada tahun lepas.[1] Ini bermakna, pendapatan kerajaan akan menurun memandangkan PETRONAS yang merupakan penyumbang terbesar kepada sumber pendapatan kerajaan mengurangkan sumbangan dividennya.

Pada 2 September, Perdana Menteri merangkap Menteri Kewangan, Datuk Seri Najib Tun Razak membuat “pengumuman gempar” bahawa harga diesel dan minyak petrol RON95 dinaikkan sebanyak 20 sen seliter mulai tengah malam hari tersebut. Pengumuman tersebut mengejutkan rakyat Malaysia daripada kemeriahan suasana sambutan Hari Kemerdekaan. Menurut Najib, ini merupakan salah satu langkah rasionalisasi atau penyusunan semula subsidi yang dilaksanakan secara berperingkat oleh kerajaannya. Ia juga merupakan salah satu insiatif menuju ke arah mengukuhkan kedudukan kewangan negara dalam menghadapi persekitaran ekonomi dunia yang mencabar.[2]

Kedua-dua pengumuman tersebut dibuat secara berasingan dan kelihatan tidak berkaitan; pengamatan badan pemikir, Kajian Politik untuk Perubahan (KPRU) pula mendapati keadaan yang sebaliknya. KPRU berpendapat, dalam keadaan ekonomi dunia yang tidak menentu, tambahan pula dengan penurunan pendapatan kerajaan, penurunan eksport negara, kejatuhan nilai mata wang negara dan fiscal defisit yang masih berada dalam kedudukan yang tinggi, serta pertumbuhan ekonomi negara yang gagal mencapai sasaran, pemotongan subsidi minyak ini yang menimbulkan keresahan bercampur dengan kemarahan di kalangan rakyat Malaysia merupakan salah satu langkah bagi mengurangkan perbelanjaan kerajaan di samping mengganti balik pendapatan kerajaan yang berkurangan, memandangkan Presiden PETRONAS, Tan Sri Shamsul Azhar Abbas sebelum ini pernah mengumumkan bahawa PETRONAS berhasrat menetapkan nisbah pembayaran dividen pada paras 30 peratus, di mana jumlah dividen yang diisytiharkan akan berubah-ubah mengikut pendapatannya.[3]Penting sekali, kenaikan harga minyak ekoran penstrukturan semula subsidi ini bakal diikuti dengan pelaksanaan Cukai Barangan dan Perkhidmatan (GST).

Maka, KPRU ingin mencadangkan, sebelum kerajaan Najib dengan tegasnya membawa GST ke Parlimen semasa pembentangan Belanjawan Negara 2014, kerajaan seharusnya pertama sekali meminda Akta Pembangunan Petroleum 1974 apabila Dewan Rakyat kembali bersidang pada 23 September ini, supaya PETRONAS bertanggungjawab kepada Parlimen, bukan sekadarnya bertanggungjawab kepada Perdana Menteri bagi menjamin ketelusan atau transparensi dalam tadbir urus kedua-dua kewangan PETRONAS dan kewangan negara.

Langkah ini bukan sahaja penting bagi mempertahankan kepentingan PETRONAS daripada terus dicekik oleh kerajaan dan terpaksa menyerahkan keuntungannya kepada kerajaan tanpa ketelusan, malah ia dapat menjawab persoalan mengapa harga petrol tidak diturunkan apabila harga minyak mentah pasaran antarabangsa mencatatkan penurunan. Khususnya, dengan mengambil kira kenyataan Datuk Seri Najib Tun Razak dalam majlis perasmian Seminar Minyak dan Gas Asia 2013 (AOGC) Pusat Konvensyen Kuala Lumpur pada 10 Jun bahawa industri minyak dan gas menyumbang lebih 40 peratus kepada pendapatan negara ini. Menurut beliau, kerajaan turut menjangka PETRONAS akan menjana RM131.4 bilion kepada Pendapatan Negara Kasar (PNK).[4]

Seperti yang ditunjukkan dalam Jadual KPRU, PETRONAS merupakan pembayar cukai yang terbesar dan sumber hasil terbesar, di mana sumbangannya mencakupi sekurang-kurangnya 30 peratus daripada hasil kerajaan persekutuan.

Jadual KPRU: Hasil Kerajaan Persekutuan daripada Sumber Petroleum 2009-2013

Tahun	Jumlah Sumbangan Hasil daripada Sumber Petroleum (RM Juta)	Hasil Kerajaan Persekutuan (RM Juta)	Jumlah Sumbangan Petroleum sebagai Peratus Hasil Kerajaan (%)
2009	63,140	158,639	39.8
2010	55,313	159,653	34.6
2011	64,893	185,419	35.0
2012	66,138	207,246	31.9
2013	64,819	208,650	31.1

Hak cipta © KPRU 2013

Nota: -

2009-2011: penerimaan sebenar

2012: anggaran disemak

2013: anggaran belanjawan

Sumber: Memorandum Perbendaharaan mengenai Anggaran Hasil Kerajaan Persekutuan

Sejak perbadanannya pada tahun 1974, PETRONAS sentiasa dijadikan sebagai “kantung peribadi” kerajaan dan dananya disalurkan bagi menanggung pembiayaan projek-projek kesayangan pihak kerajaan. Sebagai syarikat minyak negara, memang dalam jangkaan PETRONAS mengisytiharkan sebahagian besar keuntungannya kepada kerajaan. Bagi tahun kewangan berakhir 31 Mac 2011, hampir 55 peratus daripada keuntungan bersih PETRONAS telah dibayar sebagai dividen kepada kerajaan, nisbah peratusan ini jauh melebihi purata 38 peratus yang dibayar oleh syarikar-syarikat minyak nasional di seluruh dunia![5]

Namun, butiran-butiran tentang bagaimana hasil yang disumbang itu dibelanja dan digunakan oleh kerajaan tidak ditunjukkan dalam akaun rasmi  atau didedahkan. Berikutan itu, KPRU berpendapat, PETRONAS harus bertanggungjawab kepada Parlimen dan tidak lagi disembunyikan daripada tatapan wakil rakyat, biarpun rakyat Malaysia.

Perbandingan syarikat minyak milik kerajaan luar negara dengan Malaysia

KPRU telah membuat kajian terhadap syarikat-syarikat petroleum nasional di luar negara dan mendapati bahawa syarikat berkenaan seperti Statoil di Norway, Pemex di Mexico, Petrobras di Brazil , dan Pertamina di Indonesia adalah tertakluk di bawah kuasa kementerian berkaitan, bukannya di tangan Perdana Menteri atau Presiden. Statoil di Norway dan Pemex di Mexico masing-masingnya diwajibkan mendapat kelulusan di Parlimen dalam hal pembukaan kawasan baru untuk penerokaan atau membuka sektor tenaga untuk pelaburan swasta. Di Brazil, Petrobras bukan sahaja bertanggungjawab kepada Menteri dan Kongress Kebangsaan, ia juga diwajibkan memberi maklumat kepada Mahkamah Audit Persekutuan. Tambahan pula, bagi menjamin ketelusan dalam pengurusan dan pentadbiran, Petrobras menubuhkan Citizen Information Service (CIS) untuk memberi maklumbalas dan panduan kepada masyarakat awam untuk mengakses kepada maklumat.

Secara perbandingan, PETRONAS di Malaysia hanya perlu melapor terus kepada Perdana Menteri dan beliau diberi kuasa sepenuh untuk meneliti akaun dan keadaan semasa kewangan PETRONAS. Peruntukan dalam Akta Kemajuan Petroleum 1974 ini menyebabkan rakyat Malaysia tidak berpeluang memantau penggunaan kewangan PETRONAS yang diperolehi daripada kekayaan sumber asli negara ini. Di samping itu, keputusan dalam hal seperti pengendalian penggunaan petroleum hanya perlu mendapatkan kebenaran Perdana Menteri dan bukannya dibahas dan diluluskan di Parlimen.

Read more at: http://kpru2010.wordpress.com/2013/09/04/kpru-biar-petronas-lapor-kepada-parlimen-sebelum-laksana-gst/ 

Start GST at a lower rate, say experts

Monday, 01 July 2013 admin-s

(The Sun Daily) - Lai believes that businesses would welcome a reduction in corporate and personal tax rates as this would increase their competitiveness in Malaysia compared with the region. However, for individuals, it would only benefit less than 15% of the Malaysian workforce who currently pay income tax.

The proposed goods and services tax (GST) should be introduced at a lower rate of 4% to 5% in order to encourage wider public acceptance of it, said economists and tax consultants, even as a launch date remains elusive.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah had last Thursday said the government has yet to decide when it will implement the GST.

"An initial GST rate of 7% (which is similar to Singapore's current rate) may be too high for Malaysia. At 7% GST, Malaysia may have to consider reducing its corporate and personal income tax rates to 20% or below," BDO Tax Services Sdn Bhd head of tax advisory David Lai told SunBiz in an interview.

He said Singapore was able to increase its GST rate to 7% from the initial 3% in 1993 as its corporate and personal income tax rates were already at 17% and 20% respectively.

"In order to encourage wider public acceptance in Malaysia, it may be prudent to introduce GST at a lower rate, for example, 4% to 5% and to reduce corporate tax and personal income tax rates more gradually," he said.

He reckoned that if GST were to be introduced at 4% to 5%, corporate and personal income tax should ideally be reduced by 2% to 3%.

Lai also said when the government indicated that it would start GST from a fixed rate of 4%, it would be tax neutral if it were implemented two years ago. But once implemented, GST revenue is expected to grow in line with the country's gross domestic product even if the rate were maintained at 4%.

However, any further delay in implementing GST would result in greater pressure for the government to increase the initial GST rate beyond 4%, he said.

"The government should ideally maintain the GST rate for at least three years before making any adjustments. Taxpayers should be given sufficient time to adapt and fully comply with the requirements under the new GST system.

"Furthermore, any increases in GST rate should only be contemplated after the government has properly studied any inflation effects. From the experience of other countries, any inflationary effects are expected to be short term and should taper off," he added.

Lai believes that businesses would welcome a reduction in corporate and personal tax rates as this would increase their competitiveness in Malaysia compared with the region.

However, for individuals, it would only benefit less than 15% of the Malaysian workforce who currently pay income tax.

On how a subsidy rationalisation programme would affect the implementation of GST, Lai said the programme is intended to gradually shift and target subsidies to the lower income groups. Similarly, when GST is implemented, a list of basic necessities would be categorised as 'zero rated' to protect the lower income group.

RAM Holdings Bhd group chief economist Dr Yeah Kim Leng also recommends a lower GST rate of 4% to 5% to start with in order to mitigate the initial concern over inflation.

"When implementing GST, you want to get the businesses and consumers familiar with and used to the system first to ensure that there is greater acceptance. You do not want to have a major shock in terms of price. It's good to start from a lower level and gradually move up," he toldSunBiz.

"This rate can be reviewed annually based on economic conditions."

Yeah said the government should take advantage of the current economic environment where there is growth, full employment and low benign inflation to introduce the GST.

"There can never be a good time to implement hard reforms but we can't ask for a better economic environment.

"Also, now that we have a new mandate, the first two years should be the time to implement GST because by the third year, it will be more difficult as other political considerations kick in. The earlier it is implemented, the better," he said.

Still, Yeah is expecting the GST to be introduced next year.

"There will be some likely clarity in the coming budget (on Oct 25) and then perhaps they can announce the implementation for 2015. It's already long overdue. The important emphasis here is to reduce government's dependence on oil and gas revenue as government income," he added.

Yeah also said the subsidies rationalisation programme has to be more targeted and efficient in order to ensure that the benefits reach the targeted group.

"The basis of subsidy is actually to help the disadvantaged. Right now, the benefits of subsidies are spread to everyone, rich and poor.

"So, there's a good justification to have a more targeted subsidies system as it would reduce the fiscal deficit by 1% to 2%. Those will be the low hanging fruits that the government can quickly benefit from."

RHB Research Institute Sdn Bhd economist Peck Boon Soon believes that the implementation of the GST could well be delayed until 2015.

"The introduction of the GST will likely lead to a one-off spike up in inflation, depending on the level of goods and services in the basket of the consumer price index (CPI) that will be affected. We expect it to add around 0.8-2.0 percentage points to the CPI, assuming about 20-50% of the goods & services in the CPI basket will be subjected to the 4% GST," he said in a report last Friday.

"As we expect inflation to average around 2.4% in 2015, the introduction of the GST could potentially push up the CPI to 3.2-4.4%, if it were to be implemented in 2015."

He expects the negative impact due to the introduction of the GST will likely be temporary and consumer spending is expected to return to a normal level after a brief period.

GST and inflation

Thursday, 23 May 2013 admin-g

In Malaysia’s case however, GST will be replacing a pre-existing tax and at a rate that is lower than the prevailing rate. Under those circumstances, the impact should be a one-time decrease in the price level, not an increase.

Hisham H.

Here are the facts:

1. Malaysia is one of the last countries in the world to implement a full fledged value-added tax. The only countries of note that have yet to implement a VAT are the United States, Hong Kong, Brunei, and the countries under the Gulf Cooperation Council (GCC). Everybody else either has it, or are implementing it.
2. Malaysia currently levies two forms of consumption tax – sales tax and service tax (henceforth SST).
3. Sales tax is levied on all goods sold or produced in Malaysia, with the exception of petroleum and exports. The current standard rate is 10%, but a lower rate of 5% is applicable to fruits, certain foodstuffs, timber, building materials, cigarettes and tobacco, and liquor and alcohol.
4. Service tax is applicable to restaurants, hotels, parking lots, golf courses, clubs, discoes, insurance agents, phone companies, professional services like accountants, lawyers and consultants, and many more at a rate of 6%. Some of these services require a minimum corporate income threshold before the tax is levied. Credit cards are also subject to a service tax, but in this case it’s a flat fee levied on principal and supplementary cards.
5. GST is going to replace both these two taxes (with the possible exception of credit cards), and from which certain essential goods will continue to be excluded i.e. zero-rated (exports, petrol and basic foods for instance).

So, let’s assume that a 7% rate will be implemented:

1. For food, the tax on basic staples will go from 5% to 0%.
2. For other foods, the tax rate will go from 10% to 7%.
3. For the “sin” goods, the tax rate will increase marginally from 5% to 7%.
4. For everything else, the tax rate falls from 10% to 7%.
5. Certain other goods, like books and petrol, will continue to attract no tax.
6. For services, the rate will increase from 6% to 7%.

When the basic tax rates on most goods at point of sale are set to fall, how on earth can this be inflationary?

Both in theory and in practice, the implementation of a VAT or an increase in the VAT rate is almost always accompanied by a one time increase in the price level (cost of living), but not the rate of price increases (inflation). There are umpteenth examples of this over the last couple of decades.

In Malaysia’s case however, GST will be replacing a pre-existing tax and at a rate that is lower than the prevailing rate. Under those circumstances, the impact should be a one-time decrease in the price level, not an increase.

The regressive nature of GST is completely irrelevant in this discussion, because we’re replacing one regressive tax with another, and moreover one that is proven to be more efficient in raising tax revenues.

Almost all the gains in revenue collection from the switch to GST from SST will come from enforcing tax collection across the chain of production and distribution of goods and services, and not an increase in the overall tax burden to consumers.

Again, how can replacing SST with GST be inflationary?

Read more at: http://econsmalaysia.blogspot.ae/2013/05/gst-and-inflation.html?spref=fb

Exempt Sabah Sarawak from GST

Monday, 20 May 2013 admin-s

Datuk Dr. Jeffrey Kitingan

The BN government should stop beating around the bush and just plainly say that it needs to raise another RM27 billion from GST, which is the equivalent to about RM1,000 per person per year, to cover the ballooning national debt which have been increased partly by the various Santa Clause programs to fish for votes in the recent general elections.

“The people of Sabah and Sarawak should be exempted from the Goods and Services Tax (GST) that appears imminently to be implemented by the BN Federal government at any time” said Datuk Dr. Jeffrey Kitingan, STAR Sabah Chief.

Foremost, the PM needs to practice what he says and start implementing his transparency programs by not “testing the people” by using mouthpieces for feedback on the intended GST implementation. 

The BN government should stop beating around the bush and just plainly say that it needs to raise another RM27 billion from GST, which is the equivalent to about RM1,000 per person per year, to cover the ballooning national debt which have been increased partly by the various Santa Clause programs to fish for votes in the recent general elections.

The BN government should not treat the people as fools anymore. People can understand the need to increase revenue to cover the national debt but whether the need to tax and burden the people is another matter altogether. The government should pay attention to reduction of economic leakages and to wipe out corruption which is probably the biggest cause for any unjustified increase in the national debt.

As for the GST itself, the federal government should exempt Sabah and Sarawak from its implementation. The GST will burden Sabahans and Sarawakians who are already poor.

Sabah and Sarawak are more than justified in being exempted from the GST implementation.

Firstly, Sabah and Sarawak, both with riches and wealth have been robbed and are now suffering from being made the two poorest states in Malaysia. In 2012, RM17.88 billion in oil revenue were siphoned by Petronas from Sabah and another RM35 billion from Sarawak. Sabah lost another RM24 billion in federal taxes and revenues collected from the state.

Secondly, the crippling cabotage policy is not only increasing the living costs of Sabahans but is stifling Sabah’s economy and making Sabah an uncompetitive investment destination. Thus, depriving our youths of further job opportunities.

If the PM is serious with his “Rakyat Didahulukan” slogan, the PM should immediately abolish the cabotage policy. There are no two ways about it. Yet, the federal and state governments are deaf to the pleas of the people to have the cabotage policy abolished.

Thirdly, rural Sabahans and Sarawakians have low household incomes and this is made even worse by the federal government’s minimum salary level which has fixed a lower minimum of RM900 for Sabah and Sarawak and discriminates against them compared to West Malaysians with a threshold level of RM1,000.

Last but not least, instead of imposing the GST on Sabah and Sarawak, the PM should stop the marginalization of Sabahans and Sarawakians and implement programs in both states to increase the income levels and improve their livelihoods, consistent with his “Rakyat Didahulukan” slogan.

If the PM fails to exempt Sabah and Sarawak from the GST implementation, he should be wary of the consequences of being the last Umno Prime Minister.

The people in Sabah and Sarawak have awoken to the concept of Sabah and Sarawak being the kingmakers and can topple the BN federal government at any time. This “kingmaker” role and leverage can be seen in the increased composition of Sabah and Sarawak lawmakers in the new Cabinet and demands for more.

“I will personally be meeting further with Sabah and Sarawak leaders and work on bringing this kingmaker role to the next level. We need to work towards the restoration of our rights and autonomy if it means toppling the current BN regime” concluded Dr. Jeffrey.

Much ado about GST

Sunday, 12 May 2013 admin-s

Vinodhani Nair, Business Circle

We first heard about the idea of a goods and services tax (GST) back in December 2009 when it was first tabled in Parliament after close to half a decade of discussions.

To learn more about GST in Malaysia:

English: http://www.gstmalaysia.org/gstcourse/images/GST-Customs-Malaysia-GST-Malaysia-GST-Course-1.pdf

BM: http://www.gstmalaysia.org/gstcourse/images/GST%20Malaysia%20GST%20Course%203.pdf

GST, which was supposed to be implemented in Q3 of 2011, is expected to replace the current sales and service taxes in the country.

While still in the offing, the GST is said to have far-reaching implications for businesses. In a media statement released by KPMG Malaysia prior to the supposed implementation, it reportedly said: “It is not just a tax issue; it is a ‘whole of the business’ issue.”

In fact, it went on to state that no one will be exempt from the GST regime, from multinational companies to small- and medium-business owners; therefore, the business community must start to plan and manage this tax transition.

Akin to the concept of a value-added tax (VAT) practised in many countries, the GST is said to be a broad-based tax of a fixed percentage on most goods, services and other items sold or consumed in a particular country. Britain and Australia have already introduced VAT or GST, and nearer to home, Singapore has implemented GST for a while now on most goods and services.

Simply put, a business or person who has registered and incorporates GST in the sales pricing to his/her customer, can claim credit for the GST included in the prices of business purchases. Therefore, a retailer, for instance, will remit the net GST on the value-added element of the goods or services. However, it is the end user or customer who will be bearing the ultimate GST and, in fact, a business concern does not bear the economic cost of the tax.

KPMG said that “to achieve an effective GST implementation, it is vital that each business must understand how GST will impact at pre- and post-implementation levels. In this respect, not only must businesses pay attention to achieving compliance with the GST law and regulations, but it is also pertinent to consider whether there are any opportunities that should be pursued. GST is here to stay and risk management of GST issues must be part of the organisation’s risk management process.”

Read more at: http://www.businesscircle.com.my/much-ado-about-gst/