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I refer to the press report on BN Bagan division secreatary Dr Tan Chuan Hong’s statement against Penang Chief Minister Lim Guan Eng on the proposed Goods and Services Tax (GST).

According to the press report, Tan chided Lim for being ignorant and causing public panic about the GST.

However, Tan himself is obviously ignorant of the statement by Idris Jala, a federal minister who recently said that the implementation of GST will raise federal revenue up to RM27 billion so that BN can fulfil its political agendas.

Unless Tan is saying that a federal minister’s words should not be taken seriously or that Idris Jala himself is ignorant, then Idris is in effect saying that the new tax will eventually cost each Malaysians an average of RM1,000 per year. This means, a household of five will have to bear about RM5,000 a year in GST in order to foot the bill for BN to realise its political manifesto.  

With 40 percent of Malaysian households living with a monthly income of RM1,500 - and 60 percent of Malaysians families living with monthly income of RM3,000 - this new tax policy will be a substantial burden to most Malaysians. As such, the introduction of the GST is indeed a serious cause of concern to all.

I have mentioned earlier that by introducing the GST at this moment when our country is stucked in the middle income trap, the federal government is technically punishing three categories of people:

1. The poor and those in the lower income group who have no choice but to consume and be taxed, and they will not get any benefit from the so-called personal tax and corporate tax deductions because they are not within any tax bracket;

2. The working class who will have to pay at least two types of tax - income tax, and now GST; and

3. Businesses - especially small traders - who will have to bear with the operational cost of implementing the GST, as well as dealing with potential slowdown in market demands if there are any increases in prices of goods and services.

While Tan and other BN leaders may look at this lightly, Pakatan Rakyat views this with great seriousness because it affects the majority of Malaysians. The people have every right to demand for explanations from the federal government over this new tax policy because it will greatly affect our lives.

Tan himself is ignorant of the GST

Tan seemed to suggest that GST will only be imposed on ‘branded’ goods, or in his words, “premium brands”. This only goes to show his own ignorance of the GST, which in principle is, and I quote from the Finance Ministry website, “... is imposed on all goods and services produced in the country, including imports” (emphasis, mine).

It is true that the government’s proposal includes exemption on certain basic foodstuff such as “rice, sugar, flour, cooking oil, vegetables, fish, meat, and eggs”, but there seems to be no indication that exemption on the GST will be based on the criteria of being “branded” or “non-branded”.

Additionally, up to now, the federal government has not been transparent with the people on the mechanism of the GST implementation, including the extent of its exemption.

The DAP and Pakatan Rakyat do not want Malaysians to be caught by surprise with this irresponsible introduction of a new tax policy which will bring a substantial financial burden to 90 percent of Malaysians.

The federal government should not implement GST at this moment and should instead focus its efforts to curb corruption and financial leakages which cost the country RM28 billion a year as reported by the auditor-general in 2008. It is highly atrocious that while BN wants to raise a further RM27 billion in revenue by taxing the people, they are losing RM28 billion a year due to various mismanagement by the federal government.

STEVEN SIM CHEE KEONG is MP for Bukit Mertajam and national political education director, DAP Socialist Youth (Dapsy).