Goods and services tax » anilnetto.com

Govt puts off GST Bill – for now

Economy, Malaysian finance/business, Poverty 30 Responses »

Mar 142010

It’s not surprising that the government has decided to put off the Goods and Services Tax (GST) for now.

While the NGOs might claim preliminary victory (they had planned a protest for Monday, when Parliament resumes) and some might think that the government has listened to the people’s concern, I believe it was the Federation of Malaysian Manufacturer’s objection that probably saved the day.

Five days ago on Tuesday, the FMM’s task force on GST recommended that the tax be deferred until Malaysia was ready (when average income was higher and income disparity lower).

We shouldn’t be too thankful to the FMM though. They very “kindly” suggested that the government consider a Retail Sales Tax instead of a GST – while the corporations continue to enjoy ever-lower tax rates. Gee, thanks!

Let them know what you think of GST

Economy, Poverty 55 Responses »

Dec 162009

A Goods and Services Tax Bill has been tabled in Parliament today.

The GST is a tax on your consumption/expenditure – though it may be mitigated by tax credits and a range of exemptions on essential items.

Proponents say it will broaden the tax base and ensure that the rich too will pay taxes – especially on luxury items – instead of escaping due to loop-holes in the tax system.

Critics argue that it is a regressive tax that will widen income disparities and result in the poor paying taxes for the first time (whereas under the present income tax system, they are exempted). Unlike in the developed nations, the majority of Malaysians do not pay income tax because of their low income; thus, they cannot receive a tax credit to reimburse them for the GST they would incur on a basic level of expenditure. Critics say it would make more sense for the government to raise money by cracking down on corruption and plugging “leakages”.

Here’s your chance to make your voice heard. If they don’t listen to you, you know what to do at the next general election.

Are you in favour of a Goods and Services Tax?

No (89%, 696 Votes)
Yes (9%, 68 Votes)
Don't know (2%, 15 Votes)

Total Voters: 779

IMF’s call for GST is part of neo-liberal agenda

Economy, Health care, IMF/World Bank, Neo-liberal economics 14 Responses »

Aug 192009

The IMF’s call for Malaysia to expedite a goods and services tax (GST) and slash subsidies is part of its larger – and now widely discredited – neo-liberal agenda. The IMF itself is struggling for relevance now as many developing countries especially in Latin America have shunned its advice after seeing the damage done to the national economies of that continent.

The neo-liberal agenda, part of the “Washington Concensus”, is to cut taxes for the rich and the corporations, slash subsidies on social spending, and promote privatisation of essential services or “user-pay” models that benefit large corporations, including MNCs.

The GST is a regressive tax that will hurt the poor, who are now outside the income tax bracket. If a tax on spending is introduced, the poor will bear a disproportionately higher tax burden (in terms of their spending compared to their income) than the rich.