I refer to the Malaysiakini report GST: Not relief but heavier burden anticipated .

I notice a few facts that are hidden from the finance minister's statement about GST. True, we need to widen our tax base, and with GST, we can derive a new tax base from foreign residents in the country, tourists and those groups who normally don’t pay tax, for example the ‘black economy’ sector and he low income group.

He said the Consumer Price Index (CPI) would not increase as a result of the GST implementation. This is bull, my apologies for my French. I had the experience of going through the first year GST introduction in New Zealand and and CPI went up as much as the rate of GST. Retailers and service providers didn’t reduce prices, no discount to soften the impact of GST.

So brace yourself for 4% inflation in 2011.

Ah, forgot to mention that in the last quarter before GST takes effect, people would buy whatever they can - whether they can afford it or not - just because they don’t want to pay GST to the government. So we can expect a surge in demand for consumer goods, people would stocking up on goods and services if they can do it. That in itself would be inflationary.

Brace yourselves if you are business owner for your administration costs would indirectly increase because now you become ‘indirect tax collectors’ for the government. Yes, you would collect GST from the consumers and remit this to the tax department. Although you would have a wee bit increase in cash flow, ie, 4%, for the month, that is still not your money.

I have been supporting the concept GST ever since the idea was first mooted in 2005. It will net a wider tax base and force the ‘black economy’ to pay taxes, indirectly. Soon, the criminals, traders, illegal immigrants and poor farmers who normally don’t pay taxes will have to pay up to 4%.

Fair enough if those people are rich but if they are poor farmers and traders, it is a burden and absolutely not fair.

We should also think of social safety net, minimum wages and help for the poor. How much does the Jabatan Kebajikan Masyarakat (Social Welfare Department) give out to every poor family if they apply for help? What is the minimum wage in Malaysia? None, there is no minimum wage.

Finance minister, your performance is dismal.