Hornbill Unleashed

May 6, 2014

GST: Najib & Co delusional

Filed under: Politics — Hornbill Unleashed @ 7:00 AM
Tags: , , , ,

Zainal Ajamaingst-300x199

It is no good claiming that other countries are imposing the same GST without really studying holistically the economic structure of those nations especially their wage model.

gstPrime Minister Najib Razak is of the opinion that the Goods and Service Tax (GST) is important for the government and good for the country.

But GST is a regressive consumption tax. This means that the more a person consumes the more tax that person has to pay.

This type of tax has been imposed by other countries throughout the world with diverse consequence.

Malaysia studied none of these countries before imposing such tax on its people.

Unlike other countries in the world about 80% of working Malaysians are wage earners.

This means they receive a fixed steady monthly income. Sadly, the value of this income is diminishing due to inflations and the decline of the ringgit.

The situation is exacerbated by individual income which has never been increased for more than 20 years.

Malaysians used to be praised as having the most savings but lately the number of households in debt has increased to more than 80%.

This could be perhaps due to declining incomes and increased prices in essential goods.

In such a case, the government is already using individual debt to offset the burgeoning national debt.

In short the people have to pay for the government’s extravagance and leakages.

As an economic strategy to help the government, this is simply not sustainable.

Input and Output GST taxes

The GST will impose additional financial burden on at least 80% of the Malaysian workforce especially to those earning less than RM3,000 a month.

The long list of people that need the BR1M handouts is one good example of the number of household that needs government assistance.

This is because each of these household will spend most of their fixed monthly income to purchase basic household items.
Such data may be collated from the Lembaga Hasil Dalam Negeri which vets those eligible for BR1M.

The figures of the people that do not pay tax is not included.

Once GST is imposed then the price of goods as we know it now will increase tremendously depending on the number of GST (Input Tax) imposed on the products.

In addition to this input tax, there is also the GST (Output Tax) that each consumer needs to pay the minute they purchase for the product.

It is no good using the excuse that the majority of the countries in the world are imposing the same GST without really studying holistically the economic structure of those nations especially their wage model.

Similarly there is no point in saying that GST is exempted on essential goods such as food stuff, flour and edible oil.

This is because these essential goods are inter-dependent on other factors along the business-chain before it reaches the consumers.

These inter-dependent factors which are not exempted from consumption tax will push up the price of a product.

For example, rice must be transported from the fields to the warehouse before it is again transported to the shops where it is stored for a while before consumer purchases it.

Even though rice itself is an essential item which is exempted from GST, but the logistics, storage and labour is not exempted from GST.

As a result, rice will become more expensive due to GST.

Therefore whoever is saying that GST is good for this country is delusional.

 

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4 Comments »

  1. The intention of GST that the Govt want to implement is to rescue the sinking ship – the state of our debt but not actually to help the Rakyat. Those countries that imposed GST are some of them welfare state. For Malay we gave BRIM but this is not being implemented properly. Many individuals who have the means and money get BRIM like the mother/wife of well to do towkays. This all boil out to no proper and meticulous implementation and inforcement. We don’t really need BRIM. What we need is for the Govt to look into the salary of the majority of the people especially the lower income civil servants. Further the prices of goods go sky rocketting without being controlled and monitored properly. No doubt the Govt controls the prices of necessities but living in this affluent community people need to enjoy luxury items the basic being good houses. Within 35 years from the era of Mahathir and till Najib, the salary only increase by 3 times but most of the items including cars and houses increase by 10 times or more. We gave been neglecting our citizen well being for the past 30 years in pursuit of mega developments and projects that mostly failed and enriching a few cronies. We don’t really look at the welfare and well being of our people. We spent alot on unnecessary things. We are proud to show off to foreigners on how developed and rich we are by having mega buildings and infrastructure and yet our people in villages are poor. Until now after 50 years of joining Malaysia, Sarawak and Sabah have no decent highway to be proud of. When big short or Minister or our king visit these back ward places we rush to make it better just to ensure that they have good feeling and the person in charge is doing the job. It remind me of Chairman Mao era where when he visited the country side the padi field are blooming and ready for harvesting. In fact it is instantly transferred from somewhere else just to show off to the Chairman. We must get rid of this damaging culture if we want to be a developed country. We are easily bought by big china man towkay to approve development projects resulting in crowded and unorganized planning. We need to stop all these nonsenses.

    Comment by Ali bin Abu — May 6, 2014 @ 6:11 PM | Reply

  2. Dengan GST, semua orang kena bayar cukai, termasuk golongan miskin dan pencen.
    Macam mana nak dahulukan rakyat?

    Comment by Mat Jasin — May 6, 2014 @ 11:31 AM | Reply

  3. It’s so like the BN to do something bad and then tell us that other countries also do the same thing. But they never copy the good things that other countries do, good governance like a clean government which don’t indulge in corruption, religious freedom, rule of law, an efficient public service, generous welfare system and host of other good things that can make our lives much more comfortable. Everything that is rotten in the world is enthusiastically endorsed by the Najib regime because of their greed and craze for power. But stupid Malaysians still vote for them.

    Comment by apai — May 6, 2014 @ 8:55 AM | Reply

    • It’s called a “feel good syndrome” being propagated by bn. The less informed masses are falling for it ‘hook, line and sinker’. Comparing oneself with the worst always make one feel better. But it is only a feeling. We should compare ourselves with the best and try harder to be one, a much better policy for the longer term. But alas, our politicians are mostly short sighted and self-serving!

      Comment by +60 — May 7, 2014 @ 4:17 AM | Reply


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