The moral case for GST

The road to a broad-based consumption tax in Malaysia has been long and tortuous, stretching back more than a decade before its brief life under Barisan Nasional (BN). In December 2009, the then-government first introduced the Goods and Services Tax (GST) Bill in Parliament, pledging that a uniform, 6% levy would replace the patchwork of Sales and Service Taxes (SST) then ranging from 5 to 15%.
Despite initial plans to roll out GST by late 2011, fierce public resistance, fueled by fears of rising living costs and concerns about insufficient safeguards for low-income households, led to repeated postponements.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Malay Mail

2 hours ago

• Malay Mail

Onn Hafiz urges Putrajaya to let Johor lead decentralised project approvals amid RM10b worth of stalled developments

JOHOR BARU, June 22 – Datuk Onn Hafiz Ghazi has reportedly urged federal authorities to entrust state leaders with the authority to approve and implement development projects more efficiently, amid hundreds of stalled construction plans in Johor. Berita Harian quoted the Johor menteri besar proposing that his state be allowed to pioneer a decentralised model for project implementation, saying this could improve delivery and accountability. 'If they're not ready to implement this nationwide, let Johor be the pioneer,' he was quoted saying. 'God willing, Umno and Barisan Nasional leaders in Johor will uphold their responsibilities with integrity, for the sake of religion, race and country.' He said a total of 222 development projects worth an estimated RM10 billion in Johor, scheduled between 2016 and last year, have yet to begin. Onn Hafiz said the stalled projects, which include roads, mosques, hospitals and health clinics, were intended to benefit the public but remain unimplemented. 'When I asked about it in meetings, they told me not to worry, that they would check with the respective ministries and the projects would be approved. All these projects are meant for the people, and yet, to this day, not a single one has started,' he said. Onn Hafiz, who is also the Johor Umno chief, warned that party leaders would be blamed by the public if the projects continue to stall. 'Councillors, village heads, community leaders — don't just attend meetings for show. If these projects are not moving, if the allocations are not properly utilised, let me ask you — who will the people be angry with? 'The agencies or the Umno leaders? They'll be angry with us. That's why we need to get on the ground and check,' he said. Onn Hafiz also voiced frustration over the persistent delays and the impact on public welfare. 'I don't like reprimanding others, but when it affects the well-being of the people, do not test my resolve. I will fight wholeheartedly for the people and the state of Johor — that's the spirit of Johor Umno,' he said.

The Star

4 hours ago

• The Star

Taxes should prioritise people's overall well-being

TAXES are never popular. So, it's not surprising that the recent expansion of the sales and service tax (SST) has ignited concern across Malaysia. On June 9, the government announced a targeted review of the SST rate, which would take effect from July 1. The tax rate would remain the same for essential goods, while a rate of 5% or 10% will be imposed on non-essential or discretionary goods. It was presented as a measure targeting luxury items. But the problem is, one person's luxury might be another's staple. Going by the updated list of what's taxable, the SST could have a broader impact than most thought, raising concerns about an escalation in the cost of living for everyday Malaysians. The government has previously indicated it is open to reviewing policies, especially when a lot of people raise concerns – and with the number of people worried about this tax, it would do well to make sure to review it and ensure it does not inadvertently place an undue burden on those who can least afford it. The expanded SST encom­passes a diverse range of neces­sities and services, not only ­premium goods, such as salmon and avocados. It includes wedding rentals and catering, as well as traditional medicine, postnatal massages, elderly care and beauty treatments – services often seen as fundamental life events or crucial support rather than mere indulgences. Adding to the apprehension, the expansion removes tax exemp­tions on some basic food items. Items like mangoes, apples, oranges, dates, sauces, spices, canned fruits and instant food, which were previously exempt, will now incur a 5% tax. This change is expected to increase food prices in markets, restaurants and homes alike. The number of taxable items has increased from fewer than 1,000 to over 4,000 sub-codes, while the list of exempt items has been cut by 70%. So the new tax will obviously have a wide-ranging impact on people's daily lives. The announcement on Thurs­day by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi that the government will review the implementation of the SST on selected imported goods, including common fruits such as apples and mandarin oranges, is a highly welcome development. The government's willingness to re-examine the policy is a positive step towards ensuring that taxation genuinely serves its purpose without disproportionately affecting the vulnerable segments of society. Taxes are unavoidable in modern civilisation and no country can function without them. And, Malaysia certainly cannot continue to live with increasing budget deficits every year. But the government must balance between increasing revenue collection and making sure the people don't suffer unnecessarily.

The Star

5 hours ago

• The Star

Meaningful ‘pain' that must be borne

Funding the nation: Money is needed for public services, education, and healthcare reforms, while new challenges such as artificial intelligence technology and digitalisation also demand the disbursement of funds. — 123rf TAXATION in any form and name is never popular, and the expansion of the sales and service tax (SST) is no exception. It is unpopular, full stop. Nobody likes taxes but there is no such thing as looking for a better time in the future to impose the taxes for the government to increase revenue. Billed as RM9.73 for the 1st month then RM13.90 thereafters. RM12.33/month RM8.63/month Billed as RM103.60 for the 1st year then RM148 thereafters. Free Trial For new subscribers only Follow us on our official WhatsApp channel for breaking news alerts and key updates! Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 35 years in various capacities and roles. He is now group editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer. On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.