GST is to help the people, my foot! – T K Chua

Former finance minister Tan Sri Tengku Razaleigh Hamzah said revenue from the goods and services tax (GST) would be used to settle service charges on debts incurred by Putrajaya. Deputy Finance Minister Datuk Ahmad Maslan said otherwise.  According to him, revenue from GST would be used “to help the people”.

For a country that has incurred fiscal deficit for years, does it really matter whether money from GST is used to pay debt service charges or “to help the people”?  GST is just another source of revenue to plug the bottomless pit of the government coffer which has a lot of leakage.

In fact, under our system of government, debt service charges (i.e. interest payments) are one expense that shall take precedence over other expenditures.  In other words, if the government has insufficient fund, priority must be given to payment of interest charges first.  It is a charged expense.

Hence, regardless of GST, debt service charges must be paid.  

Therefore, to assert that GST “is to help the people” is really an oxymoron argument.  Money from GST will go into the Consolidated Fund, but the spending will follow priority and precedence which may consider the interests of people last.

By the way, how could GST help the people when it is a taxation system that takes money from everybody – rich and poor, adults and babies, and workers and pensioners?  In fact, proportionately, it takes from the poor more than from the rich.  GST is a consumption tax.  If the poor spend 90% of their income on consumption, you please go figure out who will eventually pay more GST.

I am against GST not just because it is regressive.  Read my lips, I think the implementation of GST will be one massive mess-up. For a nation that is not even able to manage the parking problems, I think we will be in for shocker when come to GST implementation.

It will end up with consumers paying through their nose but the money would most probably end up somewhere else. Fraudulent claims, fake invoices, and “double or triple” bookkeeping will be rampant. Enforcement would be expensive and corruption, collusion and cheating will be endemic. Please don’t ask me how I know.  It is my sweeping intuition. But I am happy to be proven wrong. GST is to help the people, my foot!

* T K Chua reads The Malaysian Insider.