Although Pua noted the government’s intention to use the new tax to trim its budget deficit, he said Putrajaya could have slashed its debts by managing its funds better and tackling “wastage, patronage, extravagance and corruption” in its spending.
Pua also attacked minister Datuk Seri Idris Jala’s reasoning yesterday that the GST was needed to broaden the country’s tax base to enable a slash in income tax, saying that the consumption-based tax would place a greater strain on those who do not qualify to pay income tax.
“Of all the rationale provided by those in support of the immediate implementation of the GST, this must be the most unacceptable one because it means that the government will be effectively reducing the tax on the workers who earn enough to pay tax today, while, correspondingly, increasing the taxes paid by those who don’t earn enough to pay taxes,” Pua said in a statement today.
The Petaling Jaya Utara MP insisted that the introduction of GST in tandem with a slash in income tax would shift the country’s financial burden to Malaysians with lower income.
“Firstly, the poorer income groups be forced to bear the burden of the reduced income tax of the higher income groups. On top of that, they will be hit by a regressive tax regime which taxes the poor proportionately more than the rich,” Pua said.
In making his point about the GST’s regressive nature, Pua said that those who earn less will effectively be taxed a higher percentage of their income when they spend, in comparison to higher wage-earners who will pay a lower percentage of tax on their income despite the same GST rate.
“Hence the natural impact of the GST is proportionately higher on the poor than on the rich,” the DAP publicity secretary said, comparing it to the existing income tax system imposes a higher percentage of tax on those who earn more.
Yesterday, Jala noted that only less than two million people out of a 29-million strong population pay income tax, indicating it was not sustainable for the country to rely on this small group of taxpayers.
“In fact, if we don’t widen the tax base, there is absolutely no room to cut income taxes further. For various reasons, including the fact that much income goes unreported, we need to broaden the tax base,” the minister in the PM’s department wrote on his blog yesterday.
Pua also questioned Jala’s argument of the need for the country to widen its tax base, saying that the key issue was the inability of the bulk of Malaysians to earn enough to pay income tax.
“We must remember that it is not because these 85 per cent do not want to pay tax, but because they don’t earn enough to qualify to do so. It should be noted that the income tax brackets have not been modified for nearly 2 decades and the question is why are the overwhelming majority of Malaysian workers still earning suppressed wages at less than RM2,500 to RM3,000 per month?” he asked.
Despite agreeing with Jala that there are Malaysians who evade tax, Pua argued that those who do so by failing to declare their true income are a “tiny group” in comparison to the “85 per cent who don’t qualify to pay taxes”.
“Why should the failure of the authorities to enforce tax on these evaders justify the government’s decision to tax all these Malaysians who are struggling to make ends meet with income less than RM2500?” he asked.
In the same statement, Pua poured cold water on Putrajaya’s argument that the GST was vital to slash its debts, pointing out that Malaysia had experienced strong economic growth and should have enough money without having to resort to imposing more taxes.
“Due to the fact that we are fortunately blessed with oil and gas revenues, as well as an enviable economic growth record over the past decades, the government actually have enough funds in its coffers. What it has however failed to do, is to ensure that these funds are properly utlised and invested.
“Hence until this government learns and proves to the people that it knows how to manage the rakyat’s hard-earned monies in an honest, professional and efficient manner, it will have no right to raise more taxes from the people, especially from the middle-income and the poor,” Pua said.
Putrajaya is seeking to introduce the GST, possibly in the upcoming Budget 2014 that will be tabled on Friday, in a bid to broaden the tax base and to narrow the fiscal deficit.
The federal government has stated that it aims to reduce the fiscal deficit from 4.5 per cent of the gross domestic product last year to 4 per cent this year, and gradually to 3 per cent by 2015.
Amid fears that the poor would be hit the hardest by the GST, Jala yesterday said that essential goods like food, public transport and education will likely be exempted from the tax.
Jala also said that the GST would automatically tax those who are richer the most as they will consume and spend more, instead of the lower-income group.
He also pointed out that the GST will replace the current sales and service tax of between six to 10 per cent.
Jala stressed that the GST would be implemented only in 2015 if it were to be announced in Budget 2014, as 12 to 18 months is needed for preparation.
Due to public pressure, the implementation of the GST has been postponed several times since the tax was first announced during Budget 2005 - www.themalaymailonline.com
Putrajaya’s proposed Goods and Services Tax (GST) will place a greater financial burden on poor Malaysians who are already struggling to make a living, DAP’s Tony Pua said today.
Although Pua noted the government’s intention to use the new tax to trim its budget deficit, he said Putrajaya could have slashed its debts by managing its funds better and tackling “wastage, patronage, extravagance and corruption” in its spending.
Pua also attacked minister Datuk Seri Idris Jala’s reasoning yesterday that the GST was needed to broaden the country’s tax base to enable a slash in income tax, saying that the consumption-based tax would place a greater strain on those who do not qualify to pay income tax.
“Of all the rationale provided by those in support of the immediate implementation of the GST, this must be the most unacceptable one because it means that the government will be effectively reducing the tax on the workers who earn enough to pay tax today, while, correspondingly, increasing the taxes paid by those who don’t earn enough to pay taxes,” Pua said in a statement today.
The Petaling Jaya Utara MP insisted that the introduction of GST in tandem with a slash in income tax would shift the country’s financial burden to Malaysians with lower income.
“Firstly, the poorer income groups be forced to bear the burden of the reduced income tax of the higher income groups. On top of that, they will be hit by a regressive tax regime which taxes the poor proportionately more than the rich,” Pua said.
In making his point about the GST’s regressive nature, Pua said that those who earn less will effectively be taxed a higher percentage of their income when they spend, in comparison to higher wage-earners who will pay a lower percentage of tax on their income despite the same GST rate.
“Hence the natural impact of the GST is proportionately higher on the poor than on the rich,” the DAP publicity secretary said, comparing it to the existing income tax system imposes a higher percentage of tax on those who earn more.
Yesterday, Jala noted that only less than two million people out of a 29-million strong population pay income tax, indicating it was not sustainable for the country to rely on this small group of taxpayers.
“In fact, if we don’t widen the tax base, there is absolutely no room to cut income taxes further. For various reasons, including the fact that much income goes unreported, we need to broaden the tax base,” the minister in the PM’s department wrote on his blog yesterday.
Pua also questioned Jala’s argument of the need for the country to widen its tax base, saying that the key issue was the inability of the bulk of Malaysians to earn enough to pay income tax.
“We must remember that it is not because these 85 per cent do not want to pay tax, but because they don’t earn enough to qualify to do so. It should be noted that the income tax brackets have not been modified for nearly 2 decades and the question is why are the overwhelming majority of Malaysian workers still earning suppressed wages at less than RM2,500 to RM3,000 per month?” he asked.
Despite agreeing with Jala that there are Malaysians who evade tax, Pua argued that those who do so by failing to declare their true income are a “tiny group” in comparison to the “85 per cent who don’t qualify to pay taxes”.
“Why should the failure of the authorities to enforce tax on these evaders justify the government’s decision to tax all these Malaysians who are struggling to make ends meet with income less than RM2500?” he asked.
In the same statement, Pua poured cold water on Putrajaya’s argument that the GST was vital to slash its debts, pointing out that Malaysia had experienced strong economic growth and should have enough money without having to resort to imposing more taxes.
“Due to the fact that we are fortunately blessed with oil and gas revenues, as well as an enviable economic growth record over the past decades, the government actually have enough funds in its coffers. What it has however failed to do, is to ensure that these funds are properly utlised and invested.
“Hence until this government learns and proves to the people that it knows how to manage the rakyat’s hard-earned monies in an honest, professional and efficient manner, it will have no right to raise more taxes from the people, especially from the middle-income and the poor,” Pua said.
Putrajaya is seeking to introduce the GST, possibly in the upcoming Budget 2014 that will be tabled on Friday, in a bid to broaden the tax base and to narrow the fiscal deficit.
The federal government has stated that it aims to reduce the fiscal deficit from 4.5 per cent of the gross domestic product last year to 4 per cent this year, and gradually to 3 per cent by 2015.
Amid fears that the poor would be hit the hardest by the GST, Jala yesterday said that essential goods like food, public transport and education will likely be exempted from the tax.
Jala also said that the GST would automatically tax those who are richer the most as they will consume and spend more, instead of the lower-income group.
He also pointed out that the GST will replace the current sales and service tax of between six to 10 per cent.
Jala stressed that the GST would be implemented only in 2015 if it were to be announced in Budget 2014, as 12 to 18 months is needed for preparation.
Due to public pressure, the implementation of the GST has been postponed several times since the tax was first announced during Budget 2005.
- See more at: http://www.themalaymailonline.com/malaysia/article/pua-gst-to-hit-poor-severely-with-more-taxes#sthash.5SBkeur3.dpuf
Although Pua noted the government’s intention to use the new tax to trim its budget deficit, he said Putrajaya could have slashed its debts by managing its funds better and tackling “wastage, patronage, extravagance and corruption” in its spending.
Pua also attacked minister Datuk Seri Idris Jala’s reasoning yesterday that the GST was needed to broaden the country’s tax base to enable a slash in income tax, saying that the consumption-based tax would place a greater strain on those who do not qualify to pay income tax.
The Petaling Jaya Utara MP insisted that the introduction of GST in tandem with a slash in income tax would shift the country’s financial burden to Malaysians with lower income.
“Firstly, the poorer income groups be forced to bear the burden of the reduced income tax of the higher income groups. On top of that, they will be hit by a regressive tax regime which taxes the poor proportionately more than the rich,” Pua said.
In making his point about the GST’s regressive nature, Pua said that those who earn less will effectively be taxed a higher percentage of their income when they spend, in comparison to higher wage-earners who will pay a lower percentage of tax on their income despite the same GST rate.
“Hence the natural impact of the GST is proportionately higher on the poor than on the rich,” the DAP publicity secretary said, comparing it to the existing income tax system imposes a higher percentage of tax on those who earn more.
Yesterday, Jala noted that only less than two million people out of a 29-million strong population pay income tax, indicating it was not sustainable for the country to rely on this small group of taxpayers.
“In fact, if we don’t widen the tax base, there is absolutely no room to cut income taxes further. For various reasons, including the fact that much income goes unreported, we need to broaden the tax base,” the minister in the PM’s department wrote on his blog yesterday.
Pua also questioned Jala’s argument of the need for the country to widen its tax base, saying that the key issue was the inability of the bulk of Malaysians to earn enough to pay income tax.
“We must remember that it is not because these 85 per cent do not want to pay tax, but because they don’t earn enough to qualify to do so. It should be noted that the income tax brackets have not been modified for nearly 2 decades and the question is why are the overwhelming majority of Malaysian workers still earning suppressed wages at less than RM2,500 to RM3,000 per month?” he asked.
Despite agreeing with Jala that there are Malaysians who evade tax, Pua argued that those who do so by failing to declare their true income are a “tiny group” in comparison to the “85 per cent who don’t qualify to pay taxes”.
“Why should the failure of the authorities to enforce tax on these evaders justify the government’s decision to tax all these Malaysians who are struggling to make ends meet with income less than RM2500?” he asked.
In the same statement, Pua poured cold water on Putrajaya’s argument that the GST was vital to slash its debts, pointing out that Malaysia had experienced strong economic growth and should have enough money without having to resort to imposing more taxes.
“Due to the fact that we are fortunately blessed with oil and gas revenues, as well as an enviable economic growth record over the past decades, the government actually have enough funds in its coffers. What it has however failed to do, is to ensure that these funds are properly utlised and invested.
“Hence until this government learns and proves to the people that it knows how to manage the rakyat’s hard-earned monies in an honest, professional and efficient manner, it will have no right to raise more taxes from the people, especially from the middle-income and the poor,” Pua said.
Putrajaya is seeking to introduce the GST, possibly in the upcoming Budget 2014 that will be tabled on Friday, in a bid to broaden the tax base and to narrow the fiscal deficit.
The federal government has stated that it aims to reduce the fiscal deficit from 4.5 per cent of the gross domestic product last year to 4 per cent this year, and gradually to 3 per cent by 2015.
Amid fears that the poor would be hit the hardest by the GST, Jala yesterday said that essential goods like food, public transport and education will likely be exempted from the tax.
Jala also said that the GST would automatically tax those who are richer the most as they will consume and spend more, instead of the lower-income group.
He also pointed out that the GST will replace the current sales and service tax of between six to 10 per cent.
Jala stressed that the GST would be implemented only in 2015 if it were to be announced in Budget 2014, as 12 to 18 months is needed for preparation.
Due to public pressure, the implementation of the GST has been postponed several times since the tax was first announced during Budget 2005.
- See more at: http://www.themalaymailonline.com/malaysia/article/pua-gst-to-hit-poor-severely-with-more-taxes#sthash.5SBkeur3.dpuf
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