Anti-Goods and Services Tax Forum
An anti-goods and services tax (GST) forum held by Pakatan Rakyat (PR) here last night marked the coalition’s aim to use the issue to edge its rivals out come the next general election.
The forum was held to educate voters on the GST, something PR has been harping on ever since the Najib administration announced its plan to use the GST as a way to increase the efficiency of the country’s tax system.
At the forum, PR leaders argued that the implementation of a GST system to replenish the national coffers racked by a rising federal debt, believed to be more than RM300 billion, would burden voters especially the poor.
Their argument centres around three major points: the cost of its implementation given the government’s exorbitant debt, inability to regulate the complex system as evident in widespread corruption, and income stagnancy.
Penang Chief Minister Lim Guan Eng said with the old sales and services tax system, only some 1.5 million of the total of 12 million workers are taxed but its replacement with the GST will mean everyone, including poor workers, will be affected.
Selangor Mentri Besar Tan Sri Khalid Ibrahim argued that GST can only be implemented if the income gap is not as wide as that in Malaysia.
He also said that a GST is only viable if the tax rate was set at 15 to 20 per cent as in the case of other developed nations with GST bearing the cost of its implementation.
Finance Minister II Datuk Seri Husni Hanadzlah had said that the government plans to set the GST rate at 4 per cent, something Khalid said was not possible.
“So I expect them to increase it to that rate sooner or later,” said Khalid.
Another panellist, Kuala Selangor PAS MP Dr Dzulkefly Ahmad, said the government had also lied about the amount of taxpayer money needed to implement the GST, which was about RM22 million.
“The Australian government needed A$5 billion to implement the GST, given the extremely complex nature of the system, and that was 10 years ago,” said the PAS lawmaker.
He added that instead of implementing the GST, the government could find other ways to obtain revenue like stopping “financial leakages” which were causing billions in taxpayers’ money.
Petaling Jaya Utara DAP MP and one of the major critics of the GST, Tony Pua, agreed with the other panellists that the system can only be implemented if the country’s per capita income is high.
He also said that only businesses will profit from the GST and not voters.
He backed Dzulkefly’s views that there were alternative ways to increase the country’s revenue, for example, eradicating patronage economics.
“If BN keeps increasing prices and taxing people more and more, it won’t last. The GST will be the nail in BN’s coffin,” he said to loud applause.
The GST Bill is scheduled to be tabled for second reading at the March Parliament sitting It is expected to be voted through and the ruling coalition expects to fully implement the system by end-2011.
Husni said the planned GST will save businesses up to RM4 billion and add RM1 billion to the government’s tax collection in the first yearnews courtesy of Malaysian Insider
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