GEORGE TOWN, Dec 18 — Putrajaya would not need to implement the Goods and Services Tax (GST) next year if it puts a stop to the illegal outflow of money from Malaysia, Penang Chief Minister Lim Guan Eng said, noting the country has lost some RM1.38 trillion since 2003.
Referring to the latest annual report by Washington-based Global Financial Integrity, he pointed out that in 2012 alone, Malaysia lost a total RM171.11 billion.
“Malaysia ranked fifth in the world for outflow of illegal capital in 2012 and if we look at per capita, we ranked first,” he said in a press conference at his office.
According to GFI, China tops the list of top exporters of illegal capital in 2012 with an outflow of US$249.57 billion, followed by Russia (US$122.86), India (US$94.76) and Mexico (US$59.66).
Labelling the trend alarming, Lim said instead of introducing a new consumption tax to burden Malaysian consumers, Putrajaya should plug its leakages to stop the nation from bleeding dirty money.
“If they eradicate corruption, they can use the money saved and do not need to implement GST anymore,” he said.
The six percent GST, which is a consumption tax on goods and services in Malaysia, is set to be implemented on next April.
It was introduced as another stream of revenue for the federal government to resolve the country’s financial woes.
Lim noted that Malaysia has been announcing a deficit budget annually since 1998.
“The RM1.38 trillion lost since 2003 is enough to cover five national budgets,”Lim said.
He suggested that Putrajaya follow in Penang’s footsteps in achieving budget surpluses by reducing corruption.
“There is no point imposing the GST when they can’t reduce the outflow of black money,” he said.