KOTA KINABALU: The Goods and Services Tax (GST) is one of the best things that has been implemented by the Barisan Nasional (BN) government and Datuk Seri Najib Razak’s administration, said political analyst Richard TP Wong.
He said the GST policy has not only helped improve the financial situation of the government, it has in fact, solved the long-standing problem of tax evasion through a much vigorous traceability system, i.e. GST.
“Actually, tax evasion is the mother of all evils to the proper function of a government, any government. Without tax revenue or shortfall in tax collection, it will affect all functions of the government and eventually all walks of life in Malaysia. Abolish GST or reduce it to 0% will likely cause many negative scenarios,” he said.
Wong listed the following negative scenarios:
Healthcare will be affected. Healthcare quality has to reduce to cope with the shortfall in the budget. Free medicines may no longer be provided and the patient has to shoulder a much higher fee than the current RM2 per visit.
Education will also be affected. New school planning may no longer possible, and all the expenses relating to the normal function of school will have to cancel. The extra curriculum that can benefit our children would likely be removed and the hiring of teachers could be reduced, and the workload for the existing teacher will have to increase to make up the shortage, and they may have to work overtime to the point of back breaking, which indirectly will affect the quality of our education.
Police enforcement may be curtailed. Overtime for police personnel will likely be cut, operations such as regular patrolling may have to reduce due to a cut in spending. Law and order and safety to us all will unavoidably be impacted.
And BR1M will definitely be out of the window and may be gone forever. Those BR1M recipients who are unlikely to pay more than RM50 a month on GST have to see their BR1M allowance of RM100 a month goodbye. Those middle-income people will see their current non-taxable income from RM5,000 per month to lower, to RM24,000 per month, which will force them to pay about RM1,000 per month (depending on their tax allowance) on a take-home income of RM5,000 per month that is otherwise tax-free under the current income tax regulations with the consideration of GST.
“So those people still believing that doing away with GST or zero-rated GST across the board is a good thing is actually shooting their own foot,” said Wong.
Meanwhile, he said the rich, the famous and the influential will continue with their yesterday practice of playing up those accounting loopholes in the tax regulations and to continue to hide their income.
He said these rich tax evaders can continue to use their invoicing tricks to hide their sales, hike their cost, and dress their account so that their tax can be reduced to a bare minimum without the burden of GST and income tax to constrain them.
“The tax that they save or evade is another profit to these people, and they can use it to continuously support their lavish lifestyles and spending, while the rest of us will have to pick up and fill in what the rich and famous are supposed to share.
“So ask yourself again if you still want to listen to the opposition and cancel GST,” said Wong.