The Sarawak DAP has applauded the announcement made by the Pakatan Harapan government to reduce the goods and services tax (GST) to zero percent from June 1 onwards.

“This announcement by the prime minister (Dr Mahathir Mohamad) shows that Harapan is sincere and consistent in its initiative to abolish the painful tax which has impacted heavily on the rakyat's retail spending,” Sarawak DAP Youth publicity secretary Abdul Aziz Isa told Malaysiakini in a statement yesterday.

Aziz, who is also special assistant to state Harapan chairperson Chong Chieng Jen, said all registered traders must follow the decision of the zero rate GST now.

“At the same time, registered businesses are still subjected to all current regulations,” he said, quoting a Finance Ministry circular.

Aziz added that abolishing the GST was a key promise made by the Harapan coalition should it win the May 9 general election, as the people had widely blamed the GST for the high cost of living.

He also pointed out that there was little government enforcement to prevent restaurants and other retailers like supermarkets from raising prices beyond the six percent rate.

GST Act must be repealed in Parliament

“The 'zero percent' move means that the GST will be effectively abolished. But Parliament would need to repeal the GST Act 2014 before the consumption tax can be totally removed,” he explained.

“Mahathir had been our prime minister for 22 years from 1981 to 2003. And during his administration, he could run this country successfully without the GST. Even so, he had successfully transformed the country from being an agricultural-based country to becoming an ultra-chic industrial nation.

“His integrity and street-smart wisdom turned Malaysia into one of the economic Tigers of Southeast Asia. We are confident that the prime minister knows how to manage the economy without the GST."

Aziz said he was grateful to the 50.1 percent of Malaysian voters who chose the Harapan coalition at the ballot in order to end the unpopular GST.

“Just imagine what will happen if the BN was still in power at the federal level? They will definitely continue to tax the rakyat at a repressive six percent.”

He described the GST as a “non-consensual” measure that the BN government had forcefully imposed on the rakyat to bail out the government.

“We feel that overtaxing the rakyat, especially the B40 group at six percent, could have been avoided. It is common knowledge that the GST was introduced to recoup losses from the 1MDB fiasco,” Aziz said.

According to him, the country urgently needs to to get rid of the leakages and raise income levels, so that at least half of the population is able to pay the income tax.

He also hoped that the rakyat will give the central government ample time to fulfil other election pledges as it is not easy to clean up the over 60-year-old mess left behind by the defeated BN government.