Economics Politics

Pakatan’s shadow budget wants to abolish GST

Zaidi Azmi
Written by Zaidi Azmi

KUALA LUMPUR – October 25, 2017: Pakatan Harapan (PH) today unveiled its shadow budget for 2018 and not surprisingly, talks about abolishing the Goods and Services Tax but with increases in other taxes and duties.

PKR’s Kelana Jaya member of parliament Wong Chen, who was credited with drafting the budget, said at a press conference that the revenue loss from this will be RM25.5 billion.

The loss will eventually be recovered by way of a supposed post-GST-removal consumer consumption and business activity boom.

According to Wong, it will also be covered by an increase in revenue from several sources, namely corporate income tax, real property gains tax, motor vehicle licences, motor vehicle import and excise duties, other import and excise duties, as well as  stamp duty and investment income.

All these measures are expected to bring down the loss to RM14 billion, while the balance will be recovered by savings from wastage and corruption.

“By carrying this out, we should not only be able to completely cover the revenue loss from eliminating the GST but we will also in fact record a surplus of RM6 billion,” said Wong.

The plan by Pakatan is also to introduce a targeted fuel subsidy for those driving small powered cars and motorbikes. When asked to clarify, Wong said only vehicles that are 1,000cc and below are eligible.

Pakatan further intends to retain the 1Malaysia People’s Aid (BR1M), albeit changing it into a conditional cash transfer. What this means is that the handout may be distributed to only those who are employed for over three months and are registered with Employees Provident Fund and the Social Security Organisation.

The shadow budget claims to be able to curtail the Inland Revenue Board’s hardline pay first, appeal later policy and replace it with a softer approach.

“We believe that by demonstrating better governance, greater accountability and transparency, taxpayers will reciprocate by making more honest tax returns,” said Wong.

According to IRB, the direct tax revenue for 2017 is projected to be a whopping RM136.60 billion, up from last year’s RM114 billion.

Next year’s budget will be tabled on Friday.



About the author

Zaidi Azmi

Zaidi Azmi

If Zaidi Azmi isn’t busy finding his way in the city, this 26-year-old northern kampung boy can be found struggling to make sense of the Malaysian political scene. Zaidi can be reached at