No GST, BR1M with a twist in Harapan's 'spend wisely' budget

Pakatan Harapan has unveiled its shadow budget, which promises to scrap the goods and services tax (GST) and revert to the sales and services tax (SST).

While GST is expected to contribute RM42 billion in revenue for 2018, Harapan's plan to reinstate the previous taxation system would only net RM16.5 billion in revenue.

As for the RM25.5 billion shortage, Harapan claimed that channelling the revenue collected into the economy would, in turn, increase federal revenue as consumer consumption and business activities would boom.

The coalition hopes to collect an additional RM2.81 billion in corporate income tax (Cita), RM1.46 billion in excise duties on goods (except motor vehicles) and RM1.82 billion in real property gains tax (RPGT).

Harapan also expects a 20 percent increase in car sales following the abolishment of GST, which would contribute to RM1.93 billion in revenue through the collection of import tax, excise and motor vehicle licence fees.

"For 2018, we are determined to eliminate RM20 billion from wastage and corruption by slashing the budget of the Prime Minister's Department," the coalition stated in its fiscal plan titled "Spend Wisely, Cut Taxes, Choose Hope".

The alternative budget was unveiled in Parliament today, ahead of Prime Minister Najib Abdul Razak's tabling the government's budget for 2018 in the August House on Friday.

The salient points of Harapan's budget:

• Total budget allocation is RM258.52 billion with estimated revenue collection of RM229.44 billion. Estimated deficit is two percent.
   
• Operating expenditure is RM200.16 billion while development expenditure is RM58.35 billion.
   
• RM85.52 billion to be spent on civil service emoluments.
   
• All ministries must be compelled to practice dignified simplicity in hosting events and functions.
   
• Slash Prime Minister's Department's allocation to only RM8 billion compared with the RM22 billion expected to be allocated for the department next year by the BN government.
   
• Reinstate RM2 billion in grants for public universities.
   
• Allocate RM700 million to a special fund to be used for improving facilities of all types of schools, where RM210 million will go to national schools and RM70 million for each category of school.
   
• Allocate RM1 billion fuel subsidy for the people.
   
• Continue the handout of BR1M, but impose certain conditions, that is the recipient stays employed for at least three months. Such conditions will be waived for retirees and disabled persons.

[More to follow]

- Mkini