Thursday, March 4, 2010

Say "NO" to GST

The Rakyat should send a clear signal to Putrajaya that they are against the imposition of the GST (Goods and Services Tax-currently due for the 2nd reading in Parliment) as it will burden the poor,disabled and the elderly.

Some compelling arguments against the imposition of the GST:

  • GST is more suited in a high-income economy.Malaysia is still a low income economy-85% of its income earners do not qualify to pay income tax .Singapore(a high-income economy) has implemented GST but workers there earns 15 times more than their counterpart here.
  • Under the GST,everyone have to pay 4% for every item or services that they purchased regardless whether they are poor,jobless or retired.
  • Wages are low against rising costs.Only 11% of the workforce are in a position to negotiate better wages through their union affiliation.The rest are not represented and are subject to supply and demand situation. Govt has introduced the COLA for public sector to alleviate the problems of the rising costs but have largely ignored the private sector.Without a minimum wage policy or govt intervention,real incomes are shrinking in face of rising costs.GST makes it worse.
  • Impact of GST to a worker who earns RM 1000 is very much more significant than to a Manager who earns RM10,000.A lower paid person would end up pay a higher percentage of their income in taxes compared to a higher paid person.In effect, the poor are taxed more.In a progressive taxation method, a higher paid person would have to pay more tax.
  • Reform of the government sectors can be a source of income rather than implementing GST which will only transfer the cost to the people. The Finance Ministry claimed that GST will increase the country's income to up to RM1 billion.On the other hand, the govt.'s income can also increase by RM2.4 billion if it decided to sell Approved Permits through open tenders.

GST implementation is a bread and butter issue for all Malaysians and should be seriously debated.No one can afford to be a fence sitter.