Use GST to lower cost of living, says consumer watchdog

Fomca's CEO Paul Selvaraj says the people are still not experiencing the benefits of paying taxes, although the Government collected RM27 billion from GST in 2015.

PETALING JAYA: People should be able to experience the benefits of paying the Goods and Services Tax (GST), said a consumer watchdog.

Federation of Malaysian Consumer Associations (Fomca) CEO Paul Selvaraj said this could be done by providing affordable housing, proper bus connectivity, proper healthcare, subsidies for childcare and through financial education to youths and young families.

“The people are still not feeling the benefits of paying taxes to the Government,” he told FMT.

He was asked to comment on how well the Government could use its revenue from GST, income tax and other taxes. The Government collected RM27 billion from GST in 2015. It expects to collect RM39 billion this year.

Selvaraj said the biggest issue with young families was owning an affordable home.

“The taxes should be used towards building affordable housing, as the gap between incomes and the prices of houses is too big. I hope there will not be a generation of people living in rented homes.”

Khazanah Research Institute (KRI) had said Malaysia’s housing market was “severely unaffordable” with a median house price that was 4.4 times the median annual household income. An “affordable market” is one where the median house price is three times the median annual household income.

The second area that needs attention is connectivity through buses from new housing areas to the cities. As more people were buying cheaper houses farther from the city, he said, the Government should provide reliable bus services so that people could leave their cars at home.

The third area is healthcare. Selvaraj complimented the public healthcare system for providing good service but said the Government needed to step in to regulate private healthcare.

“It is too costly. It should be regulated so that it is affordable for the middle income group,” he said.

Paul said the Government should be aggressively giving free talks on financial education to youths and young couples to help them better manage their finances. This is to assist people to stay within their budget and invest intelligently.