The government's move to impose the Goods and Services Tax ( GST ) soon has come under attack from Parti Sosialis Malaysia (PSM), saying it will burden the poor as well as the middle class.

It said the government should not have gone ahead with the move for though it will not be a problem for the 6 percent rich in the country but will certainly be too much for the 70 percent poor and the rest.

"One would have thought that even the BN would have more sense than to announce a tax that will further burden the poor at this point in time when we are in the midst of the worst recession since the 1930s, when more than 50 percent of the people can't make ends meet, while the Gini coefficient (a measure of income inequality gap) is steadily deteriorating, signifying worsening inequality in income distribution," said PSM central committee member Dr D Jeyakumar.

While describing the move as "regressive", the Sungai Siput parliamentarian said that PSM is not suprised at the BN's current move.

"The BN government's fascination with the GST is quite consistent with its infantile belief that 'what is good for big business is good for all Malaysians'," he said in a press statement today.

psm declare asset 120309 jeyakumar Jeyakumar ( right ) explained that this is in accordance with the neoliberal dogma which asserts that a country's economic growth is predicated upon the growth and profitability of big business, and that wealth will trickle down to the poorer strata.

Sly shift of burden

However, he pointed out that the poorer 70 percent would become even poorer under the "regime of structural adjustments (euphemism for withdrawal of subsidised social services) and privatisation".

"This does not shake the confidence of the neolibs," he said.

He added that the move to impose GST is a blatant attempt to shift the tax burden onto the ordinary rakyat.

Jeyakumar also said that with GST kicking in, corporate tax is expected to be cut further.

"Corporate tax has dropped from 40 percent of profits in 1988 to its current 28 percent," he explained.

Prime Minister Najib Abdul Razak said that he will table the proposal at the end of the current parliamentary session next month.

He was quoted by Bernama as saying that GST would be introduced "very gently".

He gave an assurance that the GST rate will not lead to inflation, suggesting that it may be less than the current sales and services rate of between five per cent and 10 per cent.

The bill will be debated in Parliament early next year and imposed starting 2011.

However, all said and done many fear that the government might revise the rates and impose higher ones in near future.