Survey: Most Malaysians against GST, don’t trust Putrajaya to implement it

On May 1, thousands of Malaysians took part in an anti-GST rally in Kuala Lumpur. A majority of Malaysians are against the consumption tax due next April 1, a survey reveals.– The Malaysian Insider pic, June 6, 2014.

Despite Putrajaya's multi-million ringgit marketing blitz to promote the goods and services tax (GST), a survey by a private university still found that a majority of Malaysians are against the consumption tax due next April 1. 

Among other things, the survey by UCSI of 700 respondents showed that they do not accept the consumption tax, do not think the government can implement it effectively and that they are satisfied with the present tax system.

In presenting the survey’s findings, UCSI poll research centre chief executive Dr Ngerng Miang Hong said that a significant number of respondents were also still uncertain about how the tax system would work.

The survey’s findings echo the results of a similar poll in April and could hamper Putrajaya's efforts to get the public to buy into the new tax system, which it says is necessary to raise government revenue.

The survey’s most startling result found that 80% of respondents were not confident that the government would be able to implement GST effectively.

A huge majority of respondents also felt that the new tax system may be effective in other countries but may be abused by the Malaysian government.

A total of 41.7% strongly agreed with the assertion that GST “is more effective in other countries but may be abused by our government”, with 37.5% agreeing with that statement.  

Some 66% of respondents felt that the new tax will not improve the economy, while more than 83% of them believed that it will burden low- and middle-income citizens.

And 59% did not feel that they could accept the GST, the survey showed.

At the same time, 49% wanted the current sales and service tax system to continue versus 32% who felt that it was time to switch to the GST.

To illustrate how people were still unsure about the effects of GST, Ngerng said about 45.9% said they were not sure how the tax affects their cost of living while more than 47% said they were sure.

Ngerng said the survey was conducted both online and at face-to-face meetings with both rural and urban respondents between the ages of 20 and 45.

Respondents were not identified according to ethnicity but claimed that they came from diverse backgrounds.  

Ngerng announced the results at a forum titled “GST: good or bad” at UCSI in Kuala Lumpur last night.

The government plans to scrap the old sales and services tax system and replace it with a broad-based 6% GST tax that will be levied on almost everything except a list of essential goods in April next year.

Some of the goods exempted from GST include fresh food, public transport, healthcare, domestic water and education fees.

However, the tax has attracted wide public opposition with a May 1 rally against it attracting up to 15,000 people in Dataran Merdeka.

A few days later, independent pollster Merdeka Center released a survey which showed that 62% of its respondents being against the consumption tax.

The Merdeka Center survey also found that 33% of their respondents did not understand how the new system would work.

Its critics said the GST would hit disproportionately low- and middle-income earners but the Datuk Seri Najib Razak administration claimed it was necessary to trim the national deficit.

Putrajaya then announced it was spending RM250 million to explain the new tax to the public and to train businesses on how to use it.

A speaker at the UCSI forum from Barisan Nasional Youth, Neil Foo Seck Chyn, said that enforcement was key to ensuring that the new tax system did not lead to a sharp hike in prices next year.

Foo said according to the Finance Ministry, only 10% of a list of 689 common items were expected to go up in price once the GST was implemented.  

“Many of the things we consume now, such as teh tarik, already have a 10% sales tax levied on it. It’s just that we don’t realise it because businesses include it in the final price they charge us,” said Foo, who is BN Youth strategist.

“But when we take away the 10% and replace it with 6%, the price should come down. But it is up to the government to enforce this so that businesses do not try to charge us 10% and add 6%.”  

Another speaker, Ong Kian Ming of DAP, however, said businesses have no incentive to lower prices even if the prices of raw materials were lower because of GST.

Also, there is very little assurance that the government will be more accountable in how it uses the extra revenue earned from the system.

“If you collect more money without accountability, you will just end up wasting more,” said Ong, referring to wastage in government spending, highlighted in the yearly auditor general reports.

It was reported that in its first year, GST will earn the government an additional RM3 billion.

However, Pakatan Rakyat claimed that leakages in the BN government’s spending cost taxpayers between RM25 billion and RM40 billion a year.

- TMI