Look, Saudis, UAE began GST-like tax today, says See-To

PETALING JAYA: In an apparent nudge at detractors of the goods and services tax (GST) in Malaysia, BN’s Eric See-To has lauded the move by Saudi Arabia and the United Arab Emirates (UAE) to introduce value-added tax (VAT) there effective today.

The BN strategic communications director said in Facebook postings today that he hoped the levy, initiated at a rate of 5% in both countries, would power their “march toward progress and prosperity”.

He said the tax was imposed by the two governments within the framework of a unified agreement endorsed by member states of the Gulf Cooperation Council.

See-To also said the VAT, which is similar in concept to the GST, was launched at the same time as hikes in the prices of RON95 petrol by both governments, with Saudi Arabia more than doubling the rate.

He added that the Saudi government had also raised domestic electricity prices threefold today.

“The Saudi Arabia and UAE governments say these moves are essential to secure the future of their countries and make their economies more competitive and efficient,” he said.

Since the imposition of the GST in Malaysia at a rate of 6% in April 2015, the opposition, including DAP and PKR, had lambasted the policy, claiming that it was contributing to inflation and burdening the people.

In his New Year statement yesterday, DAP secretary-general Lim Guan Eng had called for the promotion of a “Malaysian dream”, saying it included being free from paying GST.

See-To also said the prices of petrol in Saudi Arabia and UAE were no longer lower than that in Malaysia.

“It was not too long ago that both countries’ petrol was way cheaper than Malaysia since they produce dozens of times more oil than our country,” he said.

Reuters reported today that the RON95 price in Saudi Arabia would be 2.04 riyals (RM2.21) per litre, up from 0.90 riyal (98 sen) a litre.

See-To said UAE’s RON95 rate for January was also raised to RM2.36 from RM2.24 previously.

On Dec 28, the price of RON95 in Malaysia dipped by 1 sen to RM2.26 per litre, while the price of RON97 also dropped by the same amount to RM2.53.

“Unlike in Malaysia, prices of RON95 petrol in both UAE and Saudi Arabia are inclusive of GST as both countries have not exempted petrol from the tax,” See-To said.

“With these moves, Saudi Arabia will now cost about the same as Malaysia while UAE’s prices will be more than us,” he added.

Recently, Prime Minister Najib Abdul Razak had said the government could not have implemented many development projects for the benefit of the people if it continued with its dependence on oil and gas resources at 41% each year.

He said the move to diversify resources, including the GST, had saved the national economy from a critical situation.

“When I took over the government, we depended on oil and gas resources by 41%. But today, our dependence is only 14% after we diversified our resources.

“Just imagine if we depended on 41% from oil resources like before and the price of oil crashed. What would happen to the national economy … the answer is, it would have been critical.”

He said GST collections provided the government with RM41 billion and if it is stopped, it would lead to problems in the government administration.

“Each year, the national budget is RM220 billion and the national development budget is estimated at RM45 billion anuually.

“If you take away the GST collection, the nation almost has no allocation each year for development,” he said. -FMT