By Aathi Shankar
THE Pakatan Harapan (PH) federal government wants to reintroduce the goods and services tax (GST) that the coalition so carefreely abolished after coming to power in May, 2018.
PH reintroduced the sales and services tax (SST) on September 1, 2018 at 16% to replace the 6% GST.
Now PH wants to restore GST at 3%! Another flip-flop! U-turn!
PH stormed to power on an aggressive anti-GST election campaign platform in the 14 General Election (GE14).
Wasn’t GST then a burden to the people?
Wasn’t GST the main cause for the rise in the prices of goods and services?
Wasn’t GST looted by the former Prime Minister Datuk Seri Najib Razak and his family to buy luxury items for themselves and enjoy vacations abroad?
Weren’t all these propaganda part of PH roguish campaign during the 14th General Election (GE14).
Didn’t PH sell all these malicious and venomous lies to deceive the people by deception to capture Putrajaya on May 9, 2018?
The Malaysian Institute of Economic Research (MIER) said Putrajaya could re-introduce GST in the 2020 Budget at a lower rate of 3% to boost government coffers.
Prime Minister Tun Mahathir Mohamad echoed that his flip-flopping government would review the proposal if that’s what the people want and if it was better than the SST.
Why the sudden change of heart and mind?
The keyword here is “that’s what the people want.”
Truth is, the people actually don’t like being taxed although they know why they are being taxed.
So it’s not about what people want.
It’s all about PH not knowing what actually the country needs.
By definition, the PH government didn’t know how to manage the country’s economy and finances.
Due to PH’ hasty move to abolish GST and reintroduce SST, the nation’s coffer has shrunk.
SST revenue cannot come near the GST collection of RM42bil – 20% of total federal government revenue.
The government has no money.
Major government link companies (GLCs) that have been the financial backbone of the government were raking profit margins between 12% and 15% annually under Najib’s administration.
Under Mahathir, these GLCs are struggling to meet their ends.
Putrajaya was forced to sell national assets at auction price to the highest bidder to sustain its own RM325 billion 2019 Budget.
Before tabling the 2019 Budget, Mahathir’s government thought it can overcome the loss in tax with the high crude oil price at USD100 per barrel.
But it didn’t happen.
A few months later, the crude oil price dropped below USD50 per barrel.
It might even go down below USD36 per barrel soon.
The fall in tax and crude oil revenues are a double-blow indeed.
Grasping this volatile nature of international crude oil market, Najib introduced 6% GST.
But PH ridiculed and belittled him, and poisoned the people’s mind to “save the nation”.
Now Mahathir’s government wants to reinstate GST, maybe at 3% for a start, to fund its 2020 Budget to be tabled this month.
Everyone knows the previous Barisan Nasional (BN) federal government, under Najib, introduced GST in April, 2015 to clampdown on tax dodgers, pre-dominantly businessmen.
The BN administration’s GST move was to ensure that the people vis-à-vis the government were not shortchanged in tax collection.
GST was universally accepted new taxation mechanism to eradicate the black market and money-laundering of black money.
The black economy is estimated to be worth RM1 trillion.
In other words, the government was losing RM1 trillion annually.
However, backed by the Chinese businessmen, the DAP crusaded to abolish GST during GE14.
Businessmen detest GST because the tax system hindered them from dodging tax.
GST was more transparent than SST, exposing costs and profits of various businesses that enjoyed a turn around of RM500,000 and above per year.
It will prevent businessmen from profiteering at the expense of consumers.
Before GE14, these businessmen clinched a deal with PH leaders, including Mahathir and DAP leaders, to replace GST with SST in return of their support.
This is the reason why businessmen backed the DAP-led PH in GE14.
They also carried out an effective and consistent anti-GST whispering campaign in their business premises and, everywhere they went, sat and chat from 2015 until it culminated with PH historic win in May 2018.
These businessmen and PH leaders, especially Mahathir and Finance Minister Lim Guan Eng, are responsible for Malaysia’s economic ills today.
Mahathir and company are now prepared to swallow their pride to reintroduce GST, perhaps by another name, as a face-saving measure to blanket their colossal failure in managing the country’s finances and economy.
The nonagenarian is wincing his embarrassment to concede that “Najib was more far-sighted and smarter than him.”