DAP Youth leader shoots down Akmal's 'regressive' GST proposal

Summary

• DAP Youth secretary Lim Chun Weng rejects Umno Youth chief Dr Akmal Saleh’s proposal to reintroduce the Goods and Services Tax (GST).

• Lim argues that while the GST is a good taxation system, it is currently too burdensome for low-income earners.

• He adds that taxation is an easy way for the government to increase revenue but the current administration is taking the hard way to priorities the people’s well-being.

DAP Youth secretary Lim Chun Weng has rejected Umno Youth chief Dr Akmal Saleh’s proposal to reintroduce the Goods and Services Tax (GST).

Lim (above) argued that reinstating the GST is not suitable for Malaysia at this time, as it would place an undue financial burden on the poor.

“Yes, it is true that the GST is a more efficient and fair tax system because no one can evade paying it.

“However, GST is a regressive tax, meaning that individuals with lower incomes will end up paying a larger proportion of their earnings compared to high-income individuals. RM100 from a low-income earner has a higher value than the same amount from a high-income earner.

“The income level of Malaysians is still low. For everyone’s information, the median salary of Malaysians at present is only RM2,844. Only 16.5 pecent of Malaysians are able to pay income tax, and more than 60 percent of Malaysians receive various forms of government assistance, including the Sumbangan Tunai Rahmah (STR) cash aid,” he said in a statement today.

He noted that lower-income groups have limited disposable income, and imposing taxes on them would directly impact their livelihoods.

He added that taxing goods would further reduce consumer spending, which could slow down the recovery of the local economy following the Covid-19 pandemic.

‘Call it by another name’

Akmal suggested the reintroduction of GST when commenting on Prime Minister Anwar Ibrahim stating that the increase in electricity tariffs would only be imposed on factories and the ultra-rich.

Pointing to a possible “domino effect”, he asked what assurance could the government provide that the increase in electricity tariffs would not lead to a rise in the prices of goods?

“I suggest to PMX (Anwar) to reintroduce GST, which has proven to be more effective in increasing national revenue and is fairer, as it has been successfully implemented worldwide.

“If ‘allergic’ to the term GST, we can call it by another name, as long as it helps boost national revenue and supports the people,” he added.

GST, first introduced by former prime minister Najib Abdul Razak in 2015, faced strong criticism from Anwar and the then-opposition, who even composed songs to condemn the tax.

‘Govt taking the hard road’

Meanwhile, Lim said the government’s current priority is to increase the income of Malaysians before more taxes are imposed on the lower-income group.

“The government’s current efforts focus on ‘raising the ceiling’ and ‘raising the floor’ as part of the Madani Economic Framework, where we strive to enhance the country’s economic capabilities and increase the income of Malaysians.

“Some of the initiatives undertaken include the Madani government increasing public sector wages and the minimum wage to help ‘raise the floor’ while also launching economic policies and plans, such as the Johor-Singapore Special Economic Zone, to attract high-quality investments and create high-income jobs.

“This is the economic reform we are implementing to boost national income. Imposing taxes is the easiest way to generate revenue, but the Madani government is taking the difficult path to ensure the people’s well-being,” he added.

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