GST is not just a tax reform; it’s an economic and social reform.
– Narendra Modi, Indian Prime Minister
Seeing how things turned out in politics and the government today, Malaysians are pining for a return to the ‘good old days’.
Of course, the government pre-GE14 (14th general election) is not facing the challenges today such as global economic recovery post-pandemic, but one might think that we bottled it all up.
Since the introduction of the Goods and Services Tax (GST) on April 1, 2015, it has become a thorn to the previous federal government.
Many opposition leaders and supporters have harped on the issue of six per cent GST and led some kind of revolt among Malaysians.
In hindsight, I believe many Malaysians would take the six per cent GST in a heartbeat compared to the myriad of taxes imposed today.
The cunning DAP, who was among the main proponents of the anti-GST campaign even took the trouble to invent a song to ridicule the tax.
A certain DAP leader and former Penang chief minister even risked making a fool of himself by singing the GST song at a public function.
Of course, GST is not without its faults; I remember in the first few weeks of its introduction, people were confused over which products and services were taxed and which weren’t.
One example then was about the cellular prepaid reload where customers have to pay an extra 60 sen for a RM10 top-up.
Now, prepaid top-ups are among the essential items and suffice it to say, Malaysians are not familiar with paying taxes up-front for everyday goods.
Today, in the current Madani government, the number of taxes as a means to boost the nation’s coffers is – for lack of a better word – taxing for consumers.
Malaysians are dreading the announcement of whatever new taxes the government plans to impose.
The luxury goods tax, now named the High-Value Goods Tax (HVGT), will start in May this year. It is expected to be imposed on big-ticket items such as private jets, yachts, jewellery and luxury cars.
Supporters of this government might say the rich should be taxed a’la Robin Hood economics, but wait; the poor ones are taxed too via the Low-Value Goods Tax (LVGT) which started Jan 1.
HVGT is expected to be set with a rate of five to 10 per cent for luxury goods and is said to be applied to various price categories. LVGT’s imposition saw overseas goods below RM500 taxed at a rate of 10 per cent.
Meanwhile, other taxes such as the Capital Gains Tax (CGT) are set to be implemented starting March 1 while the Service Tax which is currently at six per cent will be raised to eight per cent.
The government is looking to widen the scope of the Service Tax to cover other areas such as karaoke centre services, delivery services, brokerage and underwriting services, as well as logistics services effective March 1.
While all these are ongoing, plans are also in place to introduce a targeted petrol subsidy programme for RON95 in the second half of this year.
Taxes are one thing, but replacing the current petrol subsidy blanket policy is another and could trigger substantial price hikes for Malaysians.
On top of the multitude of taxes, the soon-to-be skyrocketing living costs as well as the stagnating current wage structure, everyone is feeling the pinch.
The recent decision to end the civil service pension scheme for recruits also provided a bleak future for up-and-coming young professionals who are looking to ply their trade in public service.
Meanwhile, in the private sector, many businesses that were affected by the pandemic have closed shop and those that are surviving are still struggling to recapture their financial performance.
This means, for those working in smaller companies, any hope of immediate salary reviews and increments is dashed.
The government, in introducing drastic economic recovery strategies, must anticipate the impact of their policies towards the people. However, it appears that there is no effort to soften the ground.
I think voters could never have foreseen such dire circumstances when they decided to sack the previous Barisan Nasional (BN) federal government under Datuk Seri Najib Razak.
Hindsight is 20/20. While voters get the regime change they wanted and the supposed promised reforms, as it is, the price seems costly.
We are paying it now, every day, forking out of our own pockets.
The views expressed here are those of the columnist and do not necessarily represent the views of New Sarawak Tribune.
