Tuesday, December 01, 2009

GST: First Blood

I issued my first press statement opposing the proposed Goods and Services Tax today. This will probably be the first of the many to come, and should we not be successful in pressing the Government to withdraw the bill, then, it will be a nationwide campaign all the way to the next General Elections! Prior to the recent announcements, I've already debated this issue in Parliament

Second Finance Minister, Datuk Seri Ahmad Husni Hanazlah has revealed yesterday that he expects the new law on the GST to be passed in March next year, and will be fully implemented by January 2012. He had earlier mentioned that he expects the GST rate to be set at 4%.

We would like to point out that while there are some theoretically sound reasons for the implementation of a GST system in Malaysia, it is totally inappropriate for the Government to impose GST any time in the near future as at this point of time, it will only serve as a heavy burden to the rakyat at large.

We would like to outline here 3 pre-conditions before a GST system can be imposed in Malaysia:

1.Malaysia must first achieve the “high income” status bandied about by the Prime Minister before imposing GST.

Today, out of a population of 27 million, there are in effect only 1.8 million tax-payers who pays any income tax, or only 6.7% of the population. Even if we were to take into account only the 12 million working population, it is only 15% of them who have pay any taxes. The 85% who don't pay are those who actually don't qualify to pay any taxes because their income is too low. However, with the implementation of GST, every single one of them whether they are earning RM500 a month or RM1,500 a month or even RM2,500 a month, who don't current pay any taxes, will be forced to bear the heavy burden of the GST.

Therefore, it is only fair that the income levels of the average Malaysian is raised to a level where the overwhelming majority of working Malaysians are already taxable before the switch is made to a GST or indirect taxation system.

2.The Government must get rid of all “hidden taxes” in our daily goods and services first before any new tax on such services are imposed

The rakyat are already heavily burdened by “hidden taxes” payable to Barisan Nasional (BN) crony concession companies such as the toll on the highways, or the huge subsidies to the Independent Power Producers (IPPs) as well as the high water tariffs to the privatised water concessionaires due to the lob-sided contracts signed by the Government with these parties. These “hidden taxes” are paid daily to these crony companies which amounts to billions of ringgit a year enabling them to make astronomical profits annually.

Hence until the BN Government demonstrates the political will to restructure these concessions to ease the sufferings of the man on the street, imposing the GST will only rub salt to the would of the people for we will then have to not only pay for high toll, electricity and water rates, we will have to pay GST on top of them!

The BN Government must demonstrate that it does indeed believe in its slogan of “people first”, and not in reality, “crony concessionaires first”.

3.The Government must exhaust all avenues of raising funds and ensure that maximum value is extracted from all Government assets before any attempt to raise additional taxes from the rakyat.

For example:
  1. The Government has refused to openly auction the 30,000 to 60,000 approved permits (APs) issued annually to private connected companies to import foreign vehicles which can in itself raise up to RM1.8 billion per annum. In contrast, the Second Finance Minister claimed that the new GST will only raise approximately RM1 billion per annum.

  2. The Government has refused to conduct open tenders for its privatisation exercises to ensure the best quality at the lowest cost such as the building of the new mega-Matrade Convention Centre for RM628 million.

  3. At the same time, it has also refused to openly auction its land for sale but has instead awarded a 62.5 acres piece of prime land at a valuation of RM197 million to a private company, when the independent property consultants have valued it between RM970 million to RM1.5 billion!
With so many other means of raising additional funds and mechanisms to reduce cost for the Government to carry out its programmes, there is absolutely no necessity for the Government to be imposing the GST at this stage, especially in the light of the fact that 85% of the working population will be heavily burdened because their income levels are still low.

We call upon the Prime Minister to fulfil the above conditions first, including his own promise to achieve a “high income” society, before even contemplating to reform the tax system with the implementation of the GST.


najib manaukau said...

Why are you wasting your time trying to teach the uneducated cows and pigs about facts and figures ?
Just look at the figures on ex-Malaysians immigrating to foreign countries published to day, it must be a world record. Why ?
Surely Najib must knows the seriousness of this brain drain problem that it is creating. Otherwise he won't be dishing out more incentives to tempt (beg is the better word) the permanent residences Malaysians in Singapore to return to Malaysia to work. All these non Malay Malaysians would not have left the country if they were treated equally in the first place and better still not told to go back to China in the first place by the half breeds themselves.
This time Najib is offering less tax on top of those that are offered by the Malaysian government delegations to the hundreds of thousands non Malay Malaysians professionals who immigrated to foreign countries for reasons well known to the government.
Funny on the one hand to beg these professionals to return to serve Malaysia, Najib is offering to reduce their tax by as much as 10%. Najib is now looking at introducing this 4% GST tax on everything. He has indeed a funny way to offer to 'reduce' the tax on those who return to work in Malaysia.
Or is the offer too late now ?

Anonymous said...

Dear YB Tony,

I remember the time when Y.B Anwar debate with BN minister.

The words he mention that, we must now control the leakage. That is the most most most important in the agenda not matter who is the government.

But our Parliament speaker, mention that Corruption Perception Index (CPI) is not an urgent agenda to table in the Parliament. When I read that, I am disappointed and sad.

"Corruption may kill life"

Anonymous said...

plus...1.)To rid off bankruptcy to those more than 8 years automatically.
2) To impose higher levy on food ie. vegetables, fish , chicken etc exporting to Singapore. Seller prefer to sell to Singapore and uncontrolled activities resulted price of above items are expensive/ shortage/low quality grade in Johor market.

Anonymous said...

Minimum wage first, GST later!

We must first impose a minimum wage system, before we can even start to think of GST. Our govt. must be damn bankrupt, otherwise why continue taxing the poor rakyat?

Anonymous said...

Will the gov consider any exemption for the hardcore poor, unemployed, retirees etc.

Now they consider GST to be 4%, but it will go to 5%, 6% or even 10% if they deem fit. Just look at Petronas Act and the "Hatyat" agreement. It is just similar to a company luring new employees into the organisation by promising various benefits but once the employee reports for duty, the whole scenerio change esp with the clause " to perform all other duties as deem fit by management"

Anonymous said...

Forget First Blood, I say we NUKE UMNO ASAP...

charleskiwi said...

What has happened to all the NEP or NDP funded students ?
By now the NEP or NDF must have funded more than a million students both at the local universities and the foreign varsities. There should be more than enough Ketuanan Melayu professionals by now without having to keep offering incentives to the non Malay professionals to return to Malaysia to serve.
Or have these NEP funded students too decided to stay abroad for brighter futures ?

Unknown said...

Dear All,
People may normally think that 4% of GST imposition is a bit too much at this critical moment. But, I have a different view on it.
You see, the government needs money as public fund to run this country. If the government without the sufficiency of allocation, government projects and other necessary developments and infrastructures cannot be going on progressed in time.
A government when it needs corruption to support its remedy of surviving power, it definitely needs to impose more implementations of fantastic taxes to generate itself for going on surviving freely and lustfully. Such as AP is one of the convenient profiteer to fulfill certain elites within BN in order to reciprocate in return of supports. In the name of NEP, public fund is pirated and then leaving a hole of emptiness is formed which is urgently needed a propulsion to profuse its proportion into the cavity.
People can not blame it. Not Even the lawmakers have the says to disturb its official proposal of tax impositions. Surely, the August House speaker will always bend on the ruling omnipotent mediocre who sits in the office. Nothing can be successfully provoked for debate.
After all, discretely, it's people's choices to give mandate to endorse this government to run this country. Discriminatingly, more rubbish talk will be considered as imbecility by those elites to viciously criticize its decision of policy implementation. It is the government prorogation to stop whatever displeasure revocation. On the other hand it's its prerogative to do whatever it sees it fit. Whose fault is it? We made the choices. But...............
Considering the come out of this government inability to manage this country, people must always remember that we can do what we think we should do. No more procrastinations. It brings hurt badly to people and whole nation.
Hesitation and delay is to be unkind to ourselves and as well as trying to doom this country maliciously.
.....lest we vote them out of office in next GE. Annihilation is BN's destination eventually.

Unknown said...

It is really a tough job for those responsible opposition lawmakers to help checking and uprighting the wrong done by BN current government. People give them the right to run this country, but they try to handicap its global competitiveness by imposing improper extra taxes upon people to burden. Add on more difficulties upon people and lessening normal stability of life with contentment people are keenly seeking for. Suffice to say, it is a disaster.
A country with full of natural resources is sustained badly burned of economic backwardness dues to wrong implementation of policy and over spending on projecting mega useless constructions during the years of despotic strongman politician Tun Ma management. The present government has never learned from it. Indiscretion, they don't see it. Fantastically, they are proud of it. Unable to see its disastrous reciprocation at present moment of awkwardness people have faced.
Malaysia has extremely gone slowing down its progression of development compares it to other Asian countries. If people's voices speaking out through those elected representatives are still going on unheard intentionally, the more saddening day will be coming on its way. Life will be more harder to face by people in this country of once economical tiger. Good days are gone!
No matter how hard our opposition lawmakers try their best to revoke debate and point out what is wrongly implemented. The current government officials are in almost nadir level of position nigh terribly ignorance incapable to accept the truth stated by opposition representatives appointed by people.
For example, when a company is run by a bunch of mediocre manager, it is sure going to close shop while time dues. Hence its surviving ability is going to weak and later on annul existing because of its stupid self poisoning suicidal decision made.

Anonymous said...

Why are they milking & milking the rakyat..???

Are we running out of billions for their playground..??

How to achieve this so-call high income rate arr..?????

And for who...???????????????????

Anonymous said...

The very day Najib came into power, I said it on this blog that GST was coming. A year plus later, I was proven right.

Here is my second prediction: Najib will get kicked out of office. It may not happen this year or even before GE 13 but it will happen. You can bet your life on it..

Solid Leong said...

What a sad note. Instead of steering malaysia out of the economic crisis, they are actually trying their very best and fast to milk more money from the rakyat, rich or poor.....it doesn't matter.

Anonymous said...

We have already paid 193% tax on our cars, which is the highest in the world! Thanks to BN government!. Don't ask us to pay another 4% GST more.