GST: Rakyat will have to bear RM6.4b more in taxes

KUALA LUMPUR, Dec 17 — The Pakatan Rakyat (PR) anti-GST taskforce claimed today that Malaysians will have to bear an additional RM6.4 billion in taxes if the proposed new tax system comes into force.

The government yesterday tabled a law to introduce a controversial Goods and Services Tax (GST) which it says is necessary to broaden the tax base but the opposition claims will be a burden to ordinary Malaysians.

Under the proposal, the government is looking at a GST rate of four per cent.

The GST will replace the current Sales and Services Tax (SST) system which the government claims is costing businesses and consumers more.

Finance Minister II Datuk Seri Ahmad Husni Hanadzlah later told reporters the government is estimating an increase of RM1 billion in tax collection or RM13 billion in total in the first year of the tax system's implementation.

The SST had only managed to rake in RM12 billion and has also proven to have "inherent weaknesses", Husni added.

The replacement of the SST with the GST will also see businesses save RM4 billion from GST while exporters, RM1.4 billion, he claimed.

However, PR ridiculed the minister’s statement because “it does not make sense”.

“If businesses reduce tax contribution by RM5.4 billion as stated by the Finance Minister II, while at the same time increase the collection of GST to more than RM13 billion, it can only mean that the additional RM6.4 billion must be collected from the rakyat.

"The question then is, how is it that the minister can come up with figures whereby both the lowest income group as well as the highest income group enjoy savings? The savings, which will exceed RM6.4 billion for businesses, are inevitably shifted to consumers, regardless of whether they are low wage workers, retirees, students or your average man on the street,” Petaling Jaya Utara MP Tony Pua (picture) told reporters in Parliament.

The PR anti-GST taskforce will conduct various programmes to increase public awareness and receive feedback from experts through roundtable discussions and nationwide forums.

PR also plans to convene a parliamentary caucus on the GST.

The government aims to fully implement the GST in mid-2011.