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GST MalaysiaKUALA LUMPUR, Oct 31 – The last couple of days has again put the spotlight on the Opposition and their stand on the recently introduced Goods and Services Tax (GST). This time they appear to be singing to a different tune, one that supports GST as a taxation system that is transparent, efficient and capable of improving the economy in the long run. This was reflected by PKR deputy president Azmin Ali, when he reportedly said that the Opposition never rejected GST. On Opposition leader Datuk Seri Anwar Ibrahim’s take on the GST, he did not deny recent allegations that he once backed proposals to roll out the tax system when he was deputy prime minister in 1993. He explained never being against the GST in principle, and did think that the consumption tax was more efficient that the present Sales and Services Tax (SST). When addressing the issue of GST implementation recently at an event, even DAP’s Member of Parliament for Petaling Jaya Tony Pua said they are “not hardcore anti-GST. It has its benefits”. But, adding to those views, each still maintained that it isn’t the right time yet for Malaysia to see GST being implemented. In Azmin’s case, he stated that Malaysia was not ready to implement it because a huge number of people had a household income of less than RM2,500 a month, making it difficult for the 40% of low income earners and poor to cope. Datuk Seri Anwar on the other hand, while stating that PR would consider rolling it out if they were elected to power, also maintained previous views that Malaysia would only be ready for it when its people enjoy higher income. He also clarified that he was against implementing it in 1993 as well, as Malaysia had a weak economy then. DAP’s Pua said in order for GST to come into play, Malaysia must have a high income nation with the bulk of the population paying taxes. He explained that right now the GST will create a moral hazard, with the Government continuing irresponsible spending once it’s implemented. “The government is short of money, clearly, with a debt of RM502 billion and a deficit of 4%, which they can’t seem to bring down. They are desperate. If you allow them to collect GST before reforming internal spending and procurement processes, where is the incentive then to make necessary reports,” said Pua in his speech. He further argues that the GST is being used as a cure for national debt when in actuality it acts as merely a postponement of the pain caused by this sickness. “If GST is a cure, then Greece would not have bankrupt. They have a GST rate of 21%. But it did [bankrupt] because of corruption, spending ways, contingent liabilities, all same things that may happen to Malaysia,” he added. In Pakatan Rakyat’s alternative Budget, it was strongly against the GST calling it a regressive tax. It instead proposed the introduction of a capital gains tax (CGT) on gains from the sale of financial assets such as shares, bonds and other securities.

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