Malaysiakini News

‘If Chinese firm gets GST relief, so should local companies’

Published:  |  Modified:

If China Communications Construction Company (CCCC) can be given relief from paying goods and services tax (GST) in its procurement of the East Coast Rail Link (ECRL), then the same relief should be given to local companies as well.

DAP’s Bukit Mertajam candidate Steven Sim said this is based on the government’s reasoning that the ECRL project is of “public importance”.

“Based on this reason, then the federal government should also give tax relief from GST to public projects and state government services as well as local councils, which would of course involve public importance,” Sim said in a statement today.

He also pointed out that if CCCC, who hires foreign workers from China due to “language accessibility”, can get the tax relief, then the government should also provide the tax relief and other tax incentives to local companies to hire local workers and to raise the minimum wage to RM1,500.

“In other words, why are Malaysian citizens, local companies and even state governments forced to bear the burden of GST while a foreign company gets tax relief from GST?” he questioned.

Meanwhile, DAP’s Kepong candidate Lim Lip Eng described CCCC’s tax relief as an act of double standards by caretaker finance minister Najib Abdul Razak which marginalises Malaysians.

“While a foreign-owned company is given zero GST status, why does the BN regime not take care of our own people first, by granting zero GST to those who are in any of these eight categories: the bankrupts, PTPTN loan defaulters, students, the disabled, minimum wage earners, single parents, senior citizens and retirees?”

Those who are in any of these eight categories are most deserving of the tax relief, he said, but nothing has been done to exempt them from GST.

“It is time for them and their representatives (from the eight categories) to speak up on their behalf and demand Najib and his caretaker cabinet minister for an answer before the nomination day, failing which they would certainly know who to vote come the polling day,” he said.

In a separate statement, DAP's Kampung Tunku incumbent assemblyperson Lau Weng San took aim at BN strategic communications deputy director Eric See-To, after the latter had stated that the GST relief was needed to avoid unnecessary processes and expenses, including the government having to pay GST back to itself. 

Lau said See-To should compel the caretaker government to waive GST on all related procurements and services provided by all thirteen state governments and local governments in the country.

In the case of Selangor, local councils have to suffer being placed in long waiting lists for their refunds despite “diligently paying their fair share of their GST”, unnecessarily affecting their operations.

He said the Selangor state legislative assembly has last year revealed that all local councils in Selangor paid more than RM6.16 million as GST output taxes to the Inland Revenue Board (IRB) from April 2014 to July 2017.

“However, the amount of GST waiting to be refunded by IRB to all 12 local councils in Selangor amounts to more than RM36 million within the same period. While we are not supplied with the latest information as of today, but such an RM30 million ‘deficit’, which is wholly unnecessary and manmade in nature, is certainly the last thing any government on earth will desire.

“This again proves the fact that the imposition of six percent GST on state and local governments is a burden that affects every resident even at the grassroots level. In other words, we wonder why the special treatment to CCCC when every single Malaysians would have to pay GST for car parking or renting halls,” he said.

This came following Customs director-general Subromaniam Tholasy’s confirmation that the government had indeed granted the Chinese firm relief from paying GST in its procurement of the ECRL, so as to reduce implementation costs.

Subromaniam was responding to the actions of Amanah vice-president Husam Musa, who on Monday disclosed documents revealing that the relief was granted under Section 56(3)(a) of Goods and Services Tax Act 2014 which concerns the finance minister's power to grant GST relief.

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