BN’s GST misleading, Malaysians will pay more under new tax, says DAP

A DAP lawmaker has said Putrajaya has misled the public into thinking that the price of goods and  taxes will be reduced after the introduction of the Goods and Services Tax (GST), which will replace the sales and services tax (SST).

Serdang MP Dr Ong Kian Ming (pic) said the truth was SST covered far less items than under the proposed GST.

“What the BN has not told the rakyat is that many items are currently exempted under the sales tax. Some of the items which are not charged under the sales tax but will be charged under the GST include many non-luxury items such as milk, coffee, tea, mineral water, canned fruit, newspapers, stationary, school bags, and boxes, just to name a few,” he said in a statement today.

“Electricity consumption above 200kwH (any amount above RM50) will also be charged GST. The prices of these goods will definitely increase after the GST because the removal of the SST has no effect on their prices.”

Ong said currently, the sales tax was restricted to certain restaurants and professional services provided by accountants, architects, motor vehicle services and repair centres, telecommunication services, security services, estate agents and service firms.

“But under the GST, it is possible that services provided by certain tuition centres and hair saloons will be charged GST. The wider coverage under the GST means more services will be charged the GST compared to the current service tax.

“The BN has also included some items to be tax exempted under the GST such as residential properties, financial services, health care and transportation.

This means that the end product sold is not taxed by the GST but the inputs used to produce these goods and services will still be taxed by the GST.”

Ong gave an example where residential properties would not be taxed under the GST but the construction materials used in the building of these properties will.

This, he said, means that the prices of goods and services which were tax exempt would also likely to rise as a result of the GST.

“Ultimately the argument that the rakyat will be paying less tax under the GST compared to SST is an empty lie. If this was the case, then why introduce the GST as a revenue raising measure in the first place?

“The truth is that GST will increase prices of a majority of goods and services and the financial burden to the rakyat will be increase,” he added.

On Friday, Prime Minister Datuk Seri Najib Razak announced the introduction of the GST at 6% effective April 1, 2015, to replace the sales and services taxes.