Malaysia
Deputy minister: Money for GST education did not go into Umno pockets
Malaysia Prime Minister Najib Razak speaks at the Harvard Club during the United Nations General Assembly in New York September 25, 2013. u00e2u20acu201d Reuters pic

KUALA LUMPUR, May 15 — The RM250 million allocation to facilitate the implementation of the Goods and Services Tax (GST) is not channelled to Umno politicians but is distributed by the Customs Department to selected grassroots leaders, Deputy Finance Minister Datuk Ahmad Maslan said.

Ahmad said the ministry, through the Customs Department, has written to parliamentarians to ask for the names of four of their “best speakers (penceramah)”.

These speakers are then tasked to educate the public on the controversial GST, a broad-based consumption tax system that Putrajaya plans to implement next year.

Ahmad Maslan did not specify, however, if the lawmakers are from Barisan Nasional (BN) or the opposition.

“They (the speakers) could be members of a non-governmental organisation (NGO), a state assembly representative, the village head or even businessmen,” he told reporters.

Ahmad was responding today to claims that the awareness campaign initiated by Putrajaya is ineffective as politicians who are not well-versed with the workings of the GST were allegedly being entrusted with the role of educating the public.

Prime Minister Datuk Seri Najib Razak, in his Budget 2014 speech, said Putrajaya had set aside RM250 million to facilitate the implementation of the consumption tax, of which RM150 million was set aside for software development and RM100 million for training purposes.

Just after the mass anti-GST rally on May 1 in the capital city, independent pollster Merdeka Center released a survey showing that 62 per cent of 1,009 Malaysians are against the implementation of the consumption tax.

The survey conducted between April 12 to 21 found, however, that comprehension of the GST is still low, with more than half of the respondents admitting that they do not know the workings of the tax, despite it coming into effect in less than a year.

Ahmad said today that Putrajaya will press on with its RM250 million budget to educate and facilitate the GST despite protests, as it is a taxation system that has been pending since the early 1990s.

He added that the Customs Department has conducted a “three days, two nights training” for its GST speakers at an “accelerated pace to provide proper explanation” to the masses.

The deputy minister said that a ministry-commissioned study on common consumer goods showed that only 10 per cent of 689 out of 1,000 items surveyed will see a hike in cost, as the current sales and service tax (SST) amounts to 15 per cent for some items.

Products that fall in the category are items like processed food, he said.

He added that prices of 48 per cent of the items such as hotel and telecommunications service will remain unchanged, while prices of 42 per cent of items such as clothes and household electrical goods would even decrease.

“The people can go by with their lives without being affected by the tax at all,” Ahmad told reporters, reasoning that staple food items, which include rice, vegetables, seafood and all meats, are exempted.

Once the remaining 255 items are assessed, Ahmad said Putrajaya will be issuing a food guide with recommended pricing on all the 1,000 items apart from preventive legislations to keep errant dealers in check.

The GST Bill was passed through the lower House and the Senate last month, despite stern resistance, ensuring that the consumption tax starts at a flat rate of six per cent beginning April 1 next year.

Detractors contend that the GST is a “regressive tax” that will disproportionately hit those with lower income more than affluent groups.

However, the tax, which is expected to boost the nation’s revenue by RM3 billion the first year, is to help Prime Minister Datuk Seri Najib Razak’s administration rein in spending.

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