PKR man tells how his proposal for 3% GST rejected by a ‘PH leader’
KUALA LUMPUR: PKR’s Wong Chen today revealed that he was instructed to amend a proposal to halve the goods and services tax (GST) from 6% to 3% – to 0% – in Pakatan Harapan’s shadow budget three years ago.
But the Subang MP said the instruction came too late as some 200 copies of the budget book had already been printed.
Wong Chen did not reveal who gave the instruction, but merely said it was from a “leader”.
“I still remember clearly, all my officers and my interns worked hard to replace the figure from 3% to 0%.
“I was told to defend the zero-rated GST,” Wong Chen, who was instrumental in preparing the coalition’s shadow budgets, said while debating the Supply Bill 2020 in the Dewan Rakyat today.
GST, introduced in April 2015 at 6%, was replaced with the sales and service tax (SST) on Sept 1, 2018.
Wong Chen further said that following PH’s election victory last year, he had hoped that the new government would reduce the GST rate to 3%, and carry out a detailed review before reverting to the sales and service tax (SST).
He said he wanted the incident to be put on record.
“In today’s world, where history can be rewritten and policies can be changed, I would like to put in record that the GST policy that was written in my office in 2016 was reduced from 6% to 3%,” he added.
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kaytee notes:
This explains why Nurul Izzah made a pre-GE14 call for a (bizarre) zero-rated GST, wakakaka.
I wonder which PH leader made that idiotic decision but I am fairly sure he/she was NOT Mahathir who in all fairness did voice (immediately after assuming government) his reluctance to remove Najib's GST.
But alas, 'big mouth' boasting about no GST before the election left PH with no choice but to have it removed.
I have always supported GST on the basis all would NOT be allowed to slip through the porous 'tax net' of SST. More than 160 nations around the world cannot be wrong.
Now, hearing Wong Chen (PKR) making such a confession means that GST may be on its way back, wakakaka, unless he is punished for saying unauthorised stuff, wakakaka again.
GST is indeed a powerful and efficient tax collection system. A corrupt government given this power to collect GST spells disaster.
ReplyDeleteThe BN government collected 44 billion annually from GST, compared to 22 billion that the Harapan government collected using SST. But with such a long list of "zero rated" items much of this 44 billion had to be refunded.
Out of the 44 billion collected from GST Jibby did not return 20 billion in GST tax refunds. Meaning GST collected only 22 billion, same as SST. The 20 billion was "robbed" (ha ha ha, like robbing Peter to pay Paul) from the GST Refund Escrow Account and deposited into Consolidated Account to pay off 1MDB debts, keep Felda afloat, pay Tabung Haji dividends etc....
We should only agree to adopt GST only when the government collecting it is trustworthy and not corrupt. A good measure will be Malaysia in the top 20 countries on the Transparency International index. Today we are at 61st place. I will be the first to be willing to pay 10 or 20 pct.
The Harapan government is making the improvements to reduce corruption, but we are not there yet. Say sometime around GE16 or 17.
The basis and philosophy of a consumption tax is counter-logical.
ReplyDeleteA tax on consumption discourages consumption, whether you are rich or poor. People will tend to buy the cheapest alternative, or not buy at all. Eat at home rather than go to a restaurant. Buy a generic instead of a branded product. This has a downward spiralling effect on the economy and employment.
A tax on income and profits makes more sense. Everyone wants to earn more money. All companies want to make profits. What is needed is an efficient taxation system to detect all income and profits all along the supply chain and collect taxes accordingly.
Wakakakakaka…
ReplyDelete"…supported GST on the basis all would NOT be allowed to slip through the porous 'tax net' of SST. More than 160 nations around the world cannot be wrong."
Petrified thinking that would want to think out of the box. Just want to be a follower - swallowed lock, stock & barrel of a tax system that >160 countries use to squeeze more money out of the populace, irregardless of economy status.
T20 has many ways to recoup the money paid through gst. While M40 has minimum financial reacquire tool to do the same. The B40 has NOTHING!
Read what prof Jomo Kwame Sundaram has said about smart tax law. Only then u rant about yr user paid fart!
Greece had VAT of 20% but still needed bail out by the EU. Why? Because of “porous tax net” and corruption. Yes, even VAT system can be porous.
ReplyDeleteThere are many more examples of GST not working to balance the budget.
India just introduced a complicated multi-tier GST. Expect massive evasion and corruption during the collection stage itself. Very porous here.
When there is a rich source of tax money there is no incentive for the government to reduce wastage and corruption. If they can’t balance the budget just increase the GST percentage.
Singapore and the Scandinavian countries got it right. A responsible, trustworthy government and low corruption is essential for GST to succeed. The Harapan government is on the right track but not there yet. Top 20 on the TI index first, please, then I will gladly pay.
GST and VAT are the same consumption tax, being only one component of national tax which should include income tax, company tax, etc
Deletewith GST, for example you buy a beer, chink-on-cashier 6% in Malaysia, 10% in Oz, and 20% in Greece and UK - no one who buys beer escapes - not porous at all
Greece eff-ed up because of overspending which even its tax system including VAT cannot cover
The Harapan govt will sooner or more likely (for political face and popularity) later (after GE15 if it wins again) go over to GST
Yes, when the Greece government had this power to collect taxes they splurged on hosting Olympics 2000, building infrastructure they didn't need beyond the 2-week Games. Contractors made huge amounts of money, with lots of kickbacks of course...no proper long-term feasibility studies were made, just spend spend spend...
DeleteWith consumption tax I consume cheap beer and eat at home instead of going to restaurants...service industry suffers....
During the GST days I knew many eateries and contractors who didn't charge GST, as long as you pay cash and don't ask for receipt. They want to keep their revenues below 500k so not covered by GST. Shadow economy grows....
Malaysia is not UK or Australia. Transparency Index corruption ranking:
UK = 11
Oz = 13
Greece = 67
Msia = 61
When we reach top 20 ranking I will gladly pay 20% GST, knowing my money will not be "robbed"...ha ha ha
Knowing what we know now would you allow Najib's government to continue collecting GST if they had won GE14?
Wakakakakaka…
Delete"…with GST, for example you buy a beer, chink-on-cashier 6% in Malaysia, 10% in Oz, and 20% in Greece and UK - no one who buys beer escapes - not porous at all"
The T20, being a group of resourceful investors will be recouping the extra money paid through gst for the beer(? more likely champagne!) via various government incentives for their investments.
The M40 will reschedule unnecessary expenses to pay for the beer gst.
The B40 has no choice but to pay as the items they bought r the bare essential, definitely NOT beer!
Which group has slide through the gst dragnet, directly & indirectly, AGAIN?