Najib: GST Bill to be tabled soon

ARCHIVES 2009

By admin-s On Nov 26, 2009

At the moment, people with salary below RM3,000 per month can be exempted from income tax. Now a poor person in Malaysia should be earning less than RM3,000 and with GST, that person who was not paying income tax would now instead be required to pay GST.

By Lee Wee Tak

NEW YORK, Nov 24 — Datuk Seri Najib Razak said a bill relating to the proposed introduction of the goods and services tax (GST) will be tabled for first reading at the end of the current Dewan Rakyat sitting.

The Prime Minister said the move was agreed to at the last Cabinet meeting.

I already blogged briefly about GST here.

“This will allow the public to give their comments, engage them, and if we find it necessary to fine tune it, we’ll do so,” he told Malaysian journalists covering his working visit to New York yesterday.

– majority of the Perakians want the DUN to be dissolved and fresh election called, would they be allowed to give their comments, be engages and if necessary, the EC will allow it?

He stressed that if the government decided to introduce the GST in Malaysia, it would do so “very gently”.

“It’s not going to be an abrupt introduction,” Najib said, adding that if the GST materialised, the rate would not burden the poor or middle-class Malaysians.

Now how would “not burden the poor”?

“And, it would not lead to inflation,” he added.

He has to explain how he can guarantee that there will be no inflation as a result of GST. Inflation is defined as generally increases in price of goods and services. Now if something that cost RM100 now becomes, says after GST at 5% , RM105, to me as the ultimate payer of GST, there is a price increase.

One possibility of no price increase is for the price of goods to be reduced somehow, then after the GST of 5%, remains at RM100. The is the point of view for the man in the street.

As far as I know, after the price of petrol shot up durang Badawi’s time, the hawkers raised their prices and the price of wan ton mee and teh tarik etc have remain unchanged even after the petrol price dropped.

Compliance costs to the business would increase so it is imaginable that in some way, the business community will seek to pass onto the consumers. Compliance costs ranged from software upgrade, training of staff, additional stationery, increased cost of irrecoverable trade debts etc. A business that do not pass on higher cost to its customers would be a rare breed.

Corruption is not rare in Malaysia. Corruption adds up to the cost of business and would be reflected in the selling price of goods and services so in addition to paying for cost of allt that nonsense, Malaysian consumers will now be taxed on leakages, inefficiency and corruption.

And how does this not impact the poor, and the not so poor as well?