Petrol, diesel will be hit with GST, says PKR lawmaker

Putrajaya had been mulling over the possibility of exempting RON95 petrol and diesel from GST but this possibility has been discounted by a senior Customs official today. – The Malaysian Insider file pic, September 15, 2014.

PKR strategy director Rafizi Ramli said today media reports have confirmed his suspicion that the goods and services tax (GST) will be imposed on petrol and diesel in April next year, although Putrajaya has remained mum on the issue.

The PKR vice-president said a report in a Chinese daily today quoted Royal Malaysian Customs Department senior assistant director Ishak Daud as saying that petrol and diesel would not be exempted from the consumption tax, which comes into effect on April 1, 2015.

Ishak had told Sin Chew Daily that Putrajaya would announce the addition of at least 80 items to the list of zero-rated (tax-free) items before or during the Budget 2015 to be tabled in Parliament on October 10.

"This just confirms my suspicion all this while that Umno and Barisan Nasional will impose the GST on petrol and diesel, which means the price of fuel will increase when the GST is implemented in April 2015," the Pandan MP said in a statement today.

It was previously reported that Putrajaya was mulling over the possibility of exempting RON95 petrol and diesel from GST.

Petrol, which is now being sold at RM2.10 per litre, would go up to RM2.27 at the GST rate of 6%, Rafizi said.

"If a regular user is estimated to use about 80 litres of petrol, a week which is equivalent to 320 litres a month, the increase in oil prices following the GST would mean that the petrol bill for a household would increase about RM50 a month.

"At the same time, this increase in oil prices will also cause the prices of other goods and services to go up."

He said following that, expenditure in every household would be expected to increase by at least RM100.

"I have also said that (Prime Minister) Datuk Seri Najib Razak will remove fuel subsidies and limit them to certain groups and the rest would have to buy petrol at the full price.

"I was informed that the decision has been made but has not been implemented yet as they are in the midst of finalising contract with companies tasked to upgrade fuel pumps in petrol stations for this reason," he added.

"When this happens, the burden following the increased cost of petrol will be more and the cost of goods and services will also increase."

Rafizi had previously said Malaysians should brace themselves for costlier petrol and diesel when Putrajaya carries out its plan to impose the GST.

He said the ruling Barisan Nasional government was planning to do a "shock and awe" tactic when it unveiled the new fuel subsidy scheme and bundle the broad-based consumption tax into it.

He said Putrajaya could collect an estimated RM3 billion from the fuel and diesel GST a year, and this will form between 12% and 14% of the total GST collection.

In his statement today, the PKR lawmaker called on Najib to come clean with the people and confirm that Putrajaya would be imposing the GST on fuel.

"At the same time, I call upon all Malaysians to express their opposition towards the increase in oil prices through social media before we go on to bigger protests."

- TMI