Local Politics

Jitters over plan to abolish GST

Mahathir-GST

Nadhirah Sofea
Written by Nadhirah Sofea

KUALA LUMPUR – May 14, 2018: Concerns over Pakatan Harapan’s plan to abolish the Goods and Services Tax (GST) continue to rage among Malaysians. 

An observation of the discourse on social media showed worries that replacing GST with another taxation system may not be a simple matter, with some voicing caution on how it should be done.

Among those who agree with the plan was university student Muhammad Ali Khazurin, 23.

“Abolishing the GST will lighten the burden of the people. It was a key issue in the run up to GE14 as most of us believe that GST caused prices of goods to become previously too expensive,” he said.

Ali insisted that GST was unnecessary because Prime Minister Tun Dr. Mahathir Mohamad had stated in a recent interview that the country’s income is now two or three times more compared to during his last stint as PM 15 years ago.

Ali, however, believes that the government should not immediately proceed with the plan because it needs further studies on whether it is economically feasible to do so.

Hulu Kelang Pribumi Bersatu Youth chief, Muhammad Shariel Azneil Radzi,  who is also a university student, said the GST has made the people pay more for their living expenses.

“The idea of centralising tax is good, but the implementation and the amount that was charged was too much,” he said.

Shariel said the Sales and Services Tax (SST) should once again be implemented as a replacement for GST because he claimed that under the former, only the producers of goods and providers of services would be taxed. 

Nonetheless, he said the government should not be hasty to proceed with the plan and should only do so after the matter has been discussed in parliament.

There were also many others who disagreed with the plan to abolish GST.

Muhammad Syahir Ridhwan Yusof, a member of Activist Youth Nation Malaysia believes that Malaysia may lose a lot of revenue with the abolishment of GST.

“During the former administration, the income gained from GST was used for the development of the country. Now, how will the current government gain income?

“The implementation aspects of the tax system may have not been perfect , but we cannot escape from the real purpose of GST which is to provide money for the country,” he added.

Zulkifli Ar-Rayyan, a university student concurred with Syahir that the country will probably lose a huge amount of income without GST.

“The main questions are, is the government ready to lose one of the country’s income? Is SST the best solution to offset GST loss-impact revenue loss?

“The government needs to review the above issues and in terms of whether they should abolish GST. I think it is not a good idea at all,” he said.

Pakatan Harapan in its GE14 manifesto had pledged to abolish GST and revert to SST after forming the federal government.

Despite concerns of the impact to abolish GST, Dr Mahathir had expressed confidence that Malaysia has enough revenue to abolish GST.

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Nadhirah Sofea

Nadhirah Sofea