Increase income level before implementing GST, says Pua

The DAP leader says the government will continue losing revenue as long as corruption is not eradicated.

PETALING JAYA: The government should implement a minimum wage policy and eradicate corruption before introducing the Goods and Services Tax (GST).

DAP’s Petaling Jaya Utara MP Tony Pua said this at a forum after launching his book, ‘The tiger that lost its roar: A tale of Malaysia’s political economy’ at 1 Utama here today.

Yesterday Minister in the Prime Minister’s Department Idris Jala was reported as saying that GST would help widen the government’s tax base and as a result provide funds to the government to help the poor.

The minister had added that at present only one million Malaysians were paying taxes and with GST, the government can reduce corporate and income tax. The government has not set a timeline to introduce the GST but is expected to do so soon.

Calling Idris’ argument illogical, Pua, who is also DAP national publicity secretary, said a large number of the Malaysian workforce could not pay taxes as they were earning low wages.

While he conceded that there were some who were evading taxes, Pua said the number was very small and it was up the authorities to beef up their tax collection method to trace these tax-evaders.

“But that doesn’t mean that we have to penalise those who can’t afford to pay taxes by imposing the GST,” said Pua.

Pua said that without increasing the people’s income level, GST would only become a bane to the workers’ livelihood.

“And no matter how much revenue the government gets from its taxes, it would not help anyone as long as the authorities do not weed out corruption,” he said.

Echoing Pua’s sentiments, Universiti Kebangsaan Malaysia Fellow Muhammad Abdul Khalid said the current Malaysian tax system favoured the rich.

“While other countries tax people according to their income level, our tax level remains at 26% even if the person earns RM100,000 or even RM50 million,” he said.

World Bank reported that 34% of the Malaysian workforce earned below the RM700 poverty line benchmark.