KUALA LUMPUR, 14 Apr: The Federal Government rejected the advice of the International Monetary Fund (IMF) to control spending, not spend extravagantly and to not be wasteful.
Instead, the government rejected the advice by choosing to impose the Goods and Services Tax (GST) on the people to avoid the national financial rating, which continues to decline.
The former Deputy Governor of Bank Negara, Dr Rosli Yaakop, said that the advice was issued by IMF in its evaluation on Malaysia’s economy, which is made every year under Article 4 of the Constitution.
“The IMF sees that if something is not done to Malaysia’s economy, either by cutting spending or increasing revenue, our rating will decline.
“The IMF advised Malaysia to first, be frugal in spending by not wasting, being extravagant, having an open tender system for government projects and other measures.
“The second option is to impose higher taxes in order to raise more revenue, but the Malaysian government is taking the easy way out by imposing the GST instead of taking austerity measures,” said Dr Rosli when met by Selangor Kini.
He said this when met by Selangor Kini after attending the ‘People’s Discourse: Effects of TPPA and GST to the housing sector’ at the Ampang Jaya Municipal Council (MPAJ) auditorium yesterday.
He added that the weak financial rating causes Malaysia to be susceptible to be imposed a higher interest rate if we intend to borrow from foreign financial resources.
Dr Rosli said that the people have no other choice but attend the protest which will be held in Kuala Lumpur on May 1.