Singapore GST Model Not Relevant for Malaysia Only Helps the Rich


KUALA LUMPUR, 21 May: Making the Singaporean collection of Goods and Services Tax (GST) as a model is not appropriate due to the country’s per capita income which is much lower compared to Singapore.

Imposing the GST at seven percent a envisaged by the Minister in the Prime Minister’s Department, Datuk Seri Idris Jala recently is also alarming because it is contradictory to the four percent rate previously proposed by the Ministry of Finance.

“Promising reduced corporate taxes and income taxes to offset the GST only helps the rich.

“In other words, the BN GST plan is regressive and will basically see the majority of people pay more taxes than the rich minority,” said the Chairman of the PKR Trade and Investment Bureau, Wong Chen at a press conference at the PKR headquarters at Merchant Square yesterday.

According to Wong Chen, Idris also failed to inform the actual state in Singapore when the GST was implemented in 1994 which did not immediately impose seven percent. Instead, only three percent was imposed and was raised to four percent in 2003 and only 13 years later in 2007, it reached seven percent.

According to Wong Chen who is also the Kelana Jaya Member of Parliament, the government should focus its efforts in repairing the flaws of the weak tax base, wasteful spending and corruption, thus reducing the country’s deficit.

He said that the tax base weakness stems from the fact that the majority of Malaysian’s income is still low below the taxpayers limit.

In April last year, the government postponed the reading of the GST Bill for the third time after being presented first in the House of Commons in 2009.

The postponement was taken because it is believed that it was due to BN’s concerns of being rejected in the recent 13th General Election (GE-13).

However, after BN won with a declined majority compared to that of the GE-12, it is expected that they will not hesitate to implement the GST after being approved with support from BN representatives in the House of Commons.

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