Perak DAP Economic Bureau Chief Chong Zhemin says the bottom 40% household income group find it difficult to survive on zero-GST products.
PETALING JAYA: The Millenium Development Goals Report 2015 stating that Malaysia’s poorest households were the worst hit by the Goods and Services Tax (GST) is proof that Malaysia’s GST model is still regressive, DAP’s Chong Zhemin said today.
The Perak DAP economic bureau chief stressed that it was “almost impossible” for the bottom 40% household income group (B40) in Malaysia to merely depend on zero-GST-rated products and goods to survive.
“Malaysia’s GST model is still regressive despite having the longest list of zero-rated goods in the world, making it the most complicated and cumbersome GST implementation.
“Basic necessity food items such as Milo, instant noodles, biscuits, canned food and bottled condiments are all taxed at 6%.
“How can the government expect Malaysia’s poorest households to solely feed on goods and products on this zero-rated list?”
Chong stressed in a statement that the 6% GST rate was set at an unreasonably high rate.
“The GST revenue collection has exceeded the expected collection figure by twice the amount which means the 6% GST rate was set at an unreasonably high rate.
“It would only be fair to Malaysians for the government to reduce the GST rate from 6% to 3%.
“This would also ease the B40 households from the GST burden.”
Last week, Prime Minister Najib Razak described the GST, introduced in April last year, as the saviour of the national economic and financial position following the loss in revenue from falling oil prices.
He said GST had grossed RM37.67 billion in proceeds and the projected net proceeds at the end of 2015 was RM27.126 billion. The GST net proceeds for this year are estimated to rise to RM39 billion.