MAY 17 — The unexpected has become reality for Malaysia. The Barisan Nasional (BN) which has enjoyed uninterrupted power to rule since independence has shockingly lost its mandate to a loosely formed coalition of political parties called Pakatan Harapan (PH).
While majority of the population rejoice over this much unexpected victory, what is most welcomed was the smooth transition of power. Well done to former Prime Minister Datuk Seri Najib Razak and his outgoing team for acting with utmost respect and dignity in facilitating this power transition. Once again we have demonstrated to the world that Malaysians are matured people who exemplarily uphold democratic values.
There were various issues which has caused the BNs downfall, ranging from alleged financial scandals, wide scale corruption, abuse of power and cost of living issues.
As for spiralling cost of living, people were made to believe that it was solely caused by the implementation of the GST, unfairly ignoring the fact that another major contributing factor was a sharp decline in the value of our currency which made our imports more expensive.
The PH has amplified the GST as an issue to paint a wrong picture of former government, where as a matter of fact the GST is proven to be a transparent broad based consumption tax which has been implemented by over 160 countries of the world.
Surely all these countries cannot be wrong. Although hugely unpopular, many economists consider the GST the most efficient way of widening Malaysia’s tax base.
Recently, the prime minister has abruptly announced that GST will be zero rated beginning June 1, 2018 contrary to media statement made just a few days earlier by Tan Sri Zeti Akthar Aziz that removing the GST may take more than 100 days. While consumers rejoice on false hope that prices will come down, will there be enough time for business to adjust?
Irrespective of manifesto promise, I would recommend that the government maintains GST but reassess its implementation mechanism. For instance, the tax percentage for essential products can be reduced while for luxury items it is increased.
We can apply the Indian experience where the government has categorised items in five major slabs — 0 per cent, 5 per cent, 12 per cent, 18 per cent, and 28 per cent. Why should the rich enjoy the same tax benefit as the masses? Revenue generated from GST collection should be equally distribute to support social wellbeing of lower income population.
We have to acknowledge efforts made by the previous government which has very painstakingly introduced this tax system to the extent of losing power, businesses has spent thousands if not millions in implementing it and consumers are already used to it, then why abolish it?
I am not an economist but surely we cannot depend on revenue from petrol and income tax alone. The world crude oil price is at a high now but it can crash overnight. What will be our source of revenue if world oil price eventually crash?
As for consumers, let’s relook, reconsider and review our own consumption patterns to ensure that we minimise leakage while stretching every ringgit to maximise its value. Let’s seize all opportunities which lie within our reach and mould our world to truly become a better place for ourselves.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.