‘Don’t revoke GST, study how revenue can be distributed’

KUALA LUMPUR: Johor Bahru MP Shahrir Abdul Samad wants focus to be given on how revenue from the goods and services tax (GST) can be returned to the people and how the rate can be maintained.

He said no country had ever revoked the GST after implementing it, which proved that it was relevant to the nation’s economic development.

“If the opposition wants to question the GST, about the revenue and the numbers, to the extent of rejecting the system in their alternative budget, then how come 160 other countries deemed to have more matured politics decided to maintain the GST?

“In fact, their opposition parties never called for the revocation of the GST. Instead, they keep debating on how the revenue collected should be distributed and the rate maintained,” he said when appearing as a panelist in the special “Bicara Bajet 2018” programme on TV1 last night.

The programme hosted by Dahlan Maamor also featured two other panelists: Bandar Tun Razak MP Khalid Ibrahim (independent), who is also former Selangor menteri besar, and Kelana Jaya MP Wong Chen (PKR).

They discussed Budget 2018 and Pakatan Harapan’s alternative budget.

Shahrir said unlike in other countries, the implementation of GST in Malaysia was deemed fair and non-burdening as it also provided tax exemptions for certain goods and services.

He said the government had also improved the GST in Budget 2018 by proposing tax exemption for services rendered by local authorities.

“This shows that the GST implemented in the country follows our own development mould and with the many exemptions given, it is not burdening the people,” he said.

Shahrir’s view was seconded by Khalid, who said the implementation of the GST was reasonable as it was also implemented in over 100 other countries. He added that it was also a reasonable method to increase the national income.

He said this was because with the GST, tax was collected in a comprehensive manner while other taxes might hit problems in terms of collection and would probably involve certain taxpayers only.

“In Indonesia, for example, there are 260 million people but only 20% are paying the income tax, so they lose a lot there.

“The same goes with Malaysia. There are companies that evade taxes, so the most suitable mechanism is by implementing the GST,” he said.

Khalid said the implementation of the GST appeared to have reduced the rate of income tax when the government decided to offer various perks for the low- and middle-income earners.

“Although many people say that the GST is wrong and unfair to the poor, the truth is that the rich people are paying more because they buy more goods and services, while for the poor, the government has taken care of their welfare by returning the tax revenue to them through various methods.

“So, I think the GST should not be discussed again except on how the revenue should be spent,” he said.

Meanwhile, Wong repeated the opposition’s proposal to revive the sales and services tax (SST), saying it would not burden the people as a tax collection of RM17 billion was projected compared to RM43 billion under the GST.

“I disagree that the SST is worse (than GST) because according to data, the GST will take RM43 billion of next year’s revenue, while the SST will take RM17 billion at the most.

“And over the past three years of its implementation, there have been no other tax exemptions given,” he said.

Khalid however said that under the SST, many traders had evaded taxes, while the implementation of the GST had enabled taxes to be collected transparently and returned to the people.

Shahrir also said the SST was more complicated, and that the government would continue improving the GST from time to time.

“We are confident that the government will continue to ensure that the revenue from the GST will be returned to the people in the form of subsidies,” he added.- FMT