Budget 2016 was an admission that the government had relied on taxing the people rather than the business sector, to save it from crisis.
DAP secretary-general Lim Guan Eng said this today, noting however that by not abolishing the Goods and Services Tax (GST) as pressured by the opposition, and among others, Budget 2016 would not be able to overcome the country’s economic crisis.
“Press reported widely on Budget 2016 admitting that the GST rescued the federal government from bankruptcy, and of not having enough money to pay civil servants, caused by reduced revenue following low global commodity and petroleum prices.
“GST helped the federal government to collect an expected sum of RM39 billion next year, which would be a net extra amount of RM21 billion collected, after taking into account revenue lost following the abolition of Sales and Services Tax (SST) to make way of GST.
“It is this extra RM21 billion collected from 30 million Malaysians, not from rich crony companies in petroleum or toll companies, that has saved the government," he said in his speech at the DAP Pahang state ordinary convention in Bentong today.
Slamming Budget 2016 as a mere “cosmetic packaging exercise”, Lim said the RM39 billion is taken directly from the rakyat as compared to the potential RM18 billion from the abolished sales and services tax, which would have been taken from businesses.
“In other words, 30 million Malaysians are directly impacted in paying RM39 billion because of GST, as compared to the previous scenario before GST where only businesses pay RM18 billion,” said Lim.
'Taking RM26, giving back RM1'
He also questioned how Budget 2016 could claim that it would give back to ordinary Malaysians, when the tax reliefs only amount to RM764 million .
“What type of goodies budget is this that takes RM39 billion directly from the rakyat, or RM21 billion net from the rakyat, but gives back only RM764 million?
“Based on the net figure of RM21 billion of extra GST revenue, this is just like BN taking RM26 from the rakyat but giving back only RM1!” he said.
He further questioned whether goodies given to the rakyat would be sufficient to overcome the higher cost of living has followed the implementation of GST in April.
“Many have said that life was better without the GST. I am sure the rakyat will prefer not having these goodies, if they can also not have the GST.
“That is the difference between BN and Pakatan Harapan’s budget proposal to save the economy by abolishing GST, freezing toll hikes, reducing petrol prices and resolving the RM42 billion 1MDB and RM2.6 billion donation scandals to restore the value of the ringgit,” he said.
Prime Minister Najib Razak at the tabling of the budget last Friday announced that the GST had increased government revenue by RM21 billion, which would not have happened had they stuck to the SST.
Critics however point out that this was an expected outcome since the rakyat are being thoroughly taxed.
