GST rate will increase with time, says Rafizi

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(Apr 24): The goods and services tax rate will not remain at 6% but will increase to a higher amount over time, PKR's Rafizi Ramli told a forum on the controversial consumption tax.

The PKR secretary-general said there was no country in the world that had introduced a similar consumption tax and retained the original rate.

"Why the GST is considered an easy tax and effective for the government is because it is very easy to collect taxes that can be higher just by increasing the rate every year. So this 6% rate has been fixed as the minimum rate to pay off debts and cover their current expenses.

"In the future, the government debt will continue to increase and the expenses, too, will become higher and Putrajaya will increase the GST from the current 6% to a higher rate," the Pandan MP said at a GST forum at the Petaling Jaya City Council community library.

Rafizi said if a comparison were made with countries such as Singapore which introduced the GST before Malaysia, it would show that the neighbouring country had a GST rate of only 2% when it was first introduced some 15 to 20 years ago, but that it had since increased to 7%.

"So if we start at 6%, and the rate doubles in the next 10 years, it will become 12%, for example.

"So for me, it is confirmed that the tax will be raised, it's just that we don't know when," the Pandan MP said.

When asked if there was a possibility that the tax would be increased next year, the PKR vice-president said: “I don’t think it will increase next year, as BN is already in a difficult spot now.”

He said that the increase would not happen in the next two years.

"Maybe in 2018. But there are huge risks. If BN wins, they will not increase it to 6.5%, but it might go up to 9%. So this means that if they raise it, they will take into account the years when it was not increased.

"In fact, I think looking at how BN raises the prices of goods or tariff, they usually do not go slow but instead put in a drastic hike. That is why in 2008, petrol prices were pushed up to RM2.20 from RM1.30 as they had said once before that the people will accept it once they get used to it," he said.

Rafizi also hit out at Deputy Finance Minister Datuk Ahmad Maslan who continued to compare Malaysia with other countries that have already introduced the GST.

"In this life, we don't have to see what others are doing then only we do it. We have to look at its suitability. I reject the GST because it is not suitable," he said.

Rafizi added that the implementation of the GST had to be done depending on the level of the country's economic spectrum, and that the tax was not appropriate as it burdened all layers of society including low-income earners.

"GST is a new tax concept that Malaysia had never had. And everyone, including the poor, have to pay. That is not right. The tax is oppressive and burdensome to the people," he said.

The forum, which was organised by the Universiti Kebangsaan Malaysia student council, was also supposed to feature Umno Youth exco Ibdillah Ishak as one of the guest speakers, but he failed to attend the session and did not offer a reason for his absence.

Yesterday, PKR urged Putrajaya to exempt four categories of child products from the GST including doctors' consultation fees, medication and vitamins, sanitation products and milk.

The party's strategic director Sim Tze Tzin said that Putrajaya should not be taxing those who were ill as no one wanted to be sick or have a disease.

Ahmad had previously challenged Pakatan Rakyat to come up with an alternative to the GST if they rejected its implementation.

He said that the GST was a taxation system that lessened the people's burdens, contrary to what the opposition was saying in the campaigns of both the Permatang Pauh and Rompin by-elections.

The deputy minister said that if the opposition rejected the implementation of the GST, he wanted to know what alternatives they could come up with to lessen the people's burdens and at the same time develop the country. – The Malaysian Insider