By Clara Chooi | The Malaysian Insider
IPOH, Nov 29 – DAP has urged the Federal Government to reconsider the proposed 4 per cent Goods and Services Tax (GST), claiming it would do nothing to narrow the nation’s current deficit budget and would only further burden the poor and the middle class.
Party secretary-general Lim Guan Eng said that the Government should, instead, concentrate on fighting corruption and realising savings of at least RM28bil annually instead of a mere RM1bil in additional revenue from GST.
“This RM28bil was admitted by Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah as the cost of leakages from having closed tenders in government procurement or just failing to have open tenders for government contracts in an open manner.
“If the government focuses on changing this, there is no need to impose GST on the people to raise funds.
“But unfortunately, the Barisan Nasional is not brave enough to truly fight corruption,” he said in his opening address at the Perak DAP’sn 15th annual convention here today.
In fact, Lim pointed out the supposed RM28bil in losses to corruption annually may even be an under-reported figure.
“As Time Magazine had quoted Daniel Lian, a Southeast Asia economist at Morgan Stanley in Singapore, saying that Malaysia might have lost as much as US$100bil since the early 1980s to corruption,” he said.
Lim said that the proposed 4 per cent GST, which is set to be tabled in Parliament early next year, would not widen the tax base much, seeing as the present budget deficit was over RM50bil.
“So what is an additional income of RM1bil annually? In fact, this GST would only serve to affect 85 per cent of the working population who currently do not pay taxes because their incomes are below taxable levels.
“The impact would be most severely felt on the 38 per cent of the 5.6 million households with income levels of less than RM2,000 monthly or 2.12 million households,” he said.
Lim also voiced disappointment over the “unconditional support” for “Umno’s GST” by MCA Gerakan, SUPP and MIC.
“No MCA minister has defended public interest but has continued to perpetuate this national economic divide by burdening the poor and the middle-class instead of fighting corruption to get more money. Why fear fighting corruption so much?” he said.
Lim also called for the withdrawal of the 15 per cent preferential income tax rates given to professionals in selected areas on the Iskandar Development Region, saying that the benefit should be offered to all professionals in Malaysia.
“Why is it that professionals in other states have to pay 26 per cent? How can there be 1 Malaysia when we have one country and two systems with double standards and discrimination in tax treatment?” he questioned.