GEORGE TOWN, Oct 28 — Concrete proposals to spur economic growth in Budget 2018 have laid bare the political agenda in Pakatan Harapan’s (PH) alternative budget, according to several tax specialists.

While Prime Minister Datuk Seri Najib Razak took pains to ensure adequate funding to spur growth in sectors such as tourism, healthcare and education, they noted that the federal opposition pact’s proposal lacked clear measures for the same.

Grant Thornton executive director Alan Chung instead believed that some PH proposals were designed to reinforce their previous criticisms of the government, and not to derive any tangible benefit for Malaysians.

"The proposal to slash the Prime Minister’s Department budget down by RM20 billion is a political agenda to highlight that the budget has been increasing over the years as what they’ve been claiming,” he said.

Chung along with Crowe Horwath Malaysia managing director SM Thanneermalai and Lee Hishammuddin Allen Gledhill partner S. Saravana Kumar were especially critical of the PH proposal to undo the goods and services tax (GST).

PH said it would essentially remove the GST by zero-rating all items and reintroduce the sales and services tax (SST) as a stopgap, but all three tax experts said the move would be a step backwards for the country.

Chung noted that the lack of transparency with the SST meant it could account for up to a fifth of prices without the consumer ever realising, despite the pact’s claim that it would result in cheaper goods.

He also added that the proposal failed to consider the millions upon millions that companies have spent to prepare for the tax regime

The details in Najib’s Budget also revealed that the Opposition’s alternative was designed with glaring assumptions, with little to no evidence to support the effects they claim would result.

PH claimed it could fund many of its proposals from additional revenue derived from the hypothetical results, but the tax experts were sceptical.

"I’m not convinced that a zero-rated GST will bring a 20 per cent spike in consumption, or that reinjecting RM25.5 billion into the market will bring about increase in the Real Property Gains Tax revenue or spike increases in consumption,” Saravana said.

"These are all speculations that are not backed by studies.”

While PH also proposed to raise tax rates on higher income earners, Najib yesterday announced a reduction of two percentage points for for those earning between RM20,000 and RM70,000.

This directly translates to to savings of between RM300 to RM1,000 for each taxpayer, while around 261,000 may not need to pay any taxes on their income at all.

"The alternative budget wants to increase taxes of those in the high income bracket and this will lead to brain drain because it is penalising high income earners for being successful,” Saravana said.

As for the GST being maintained with additional exemptions for certain items in 2018, Saravana said this showed that the GST was fluid and adaptable.

"It is good that reading materials are exempted and services by local councils are also exempted, it shows that the government is listening to the people and this move is very much welcomed,” he said.

Thanneermalai and Saravana both felt that Budget 2018 would help spur the country’s economy.

Najib proposed total federal spending of RM280 billion for 2018, the largest in the country’s history, while still bringing the national deficit to under 3 per cent as targeted.