pEmBeTuLaN: GST at 4-7pc under Najib’s new initiative

Monday, July 4, 2011

GST at 4-7pc under Najib’s new initiative

By Lee Wei Lian

July 05, 2011

KUALA LUMPUR, July 5 — The government could be looking at additional revenues of RM6 billion or more from the implementation of a goods and services tax (GST) of between 4-7 per cent by 2015 said Pemandu.

The GST is part of the public finance strategic reform initiative (SRI) launched here today.

Pemandu CEO Datuk Seri Idris Jala noted however that the SRI will also emphasise control of government expenditure to help improve the government’s fiscal position.

Among the areas which have been earmarked for expenditure control include subsidy rationalisation, reform of the civil service pension scheme, right-sizing the public sector and procurement.

Pemandu estimated that measures to control expenditure and increase tax compliance on top of the introduction of GST could mean an additional RM13 billion in savings and revenue for the government.

Estimates provided by Pemandu show that a GST rate of 4 per cent would create an additional revenue flow of RM6.3 billion while a GST rate of 5 per cent would create an additional RM9.7 billion in revenue if tax enforcement was strict.

Idris said that the goal of the public finance SRI was to create fiscal space for the government in order to manage financial contingencies, pay off government debts and have funds left over to invest.

He noted that Malaysia is missing out on potentially RM20 billion in taxes which could be collected based on its tax gap of 20 per cent as of 2009.

Developed countries tend to have tax gaps of only 10-15 per cent. Moreover only 1 million Malaysians pay income tax out of a total population of 28 million.

“We need to improve our tax collection,” he said in a briefing to the media.

The Public Finance SRI is one of six SRIs that were derived from the recommendations of the National Economic Advisory Council (NEAC).

The other SRIs are International Standards and Liberalisation, Public Service Delivery, Human Capital Development, Government’s Role in Business and Narrowing Disparities/Bumi SMEs.

Comments (27)

+12

okb0p· 2 hours ago

GST implementation just in time for GE13? I doubt it.__Anyway, efficiency and integrity in government planning and spending will improve the fiscal situation much more than increasing taxes will.

2 replies · active 2 hours ago

+12

Guest· 1 hour ago

Yes, if they implement the GST, you can be suer no GE will be called until it's right at the last monute OR the GE will be called first & then (if the Bn still is in power), the GST will be implemented as a tahnk you to the idiots who voted for them!

+11

lembu susu· 1 hour ago

Rakyat don't mind paying GST if the govt has a record of integrity, transparency, exhibit prudent financial management n corrupt-free. But this is opposite the case. Instead the govt has plundered the nations' wealth, n now on the brink of bankruptcy n has no choice but to find revenue. Only if all of these corrupted govt officials r brought to justice n pay back all they have stolen, GST may not need to be implemented at all

+12

al_akee115p· 2 hours ago

IJ, Monkey doing Mathematic.

+26

B.U.N.· 2 hours ago

"We need to improve our tax collection,”

Why don't you improve your tax collection instead of burdening the poor with the GST which is a regressive tax?! Why spare all the UMNOPutra rent seekers and their cronies and burden the poor instead?! There's no justification for this, and no moral ground for it. More than that, there is no moral ground or even equity ground for allowing UMNOPutra rent seeking!!!

+22

Perennilism· 2 hours ago

No, Datuk Seri Idris Jala you need to improve tax allocations not collections.

+24

Lee Teong JIn.· 1 hour ago

Increase BN's revenue by raising GST, reducing subs,etc.etc. , only 1 million pay taxes...Idris Jala , more pendatangs migrating, more good brains leaving, less than 1 million pay taxes....soon to be..... More "immigrants" given citizenship, more public funds needed to provide, less taxes collected......Malaysia Boleh,,.. pls do not complain

+12

Leslie Fong· 1 hour ago

Its just a public figure..its doesnt make normal people like us easy life either.
Goods n foods price keep increasing..but our wages still lower compare with other countries.
How to stimulate our income into higher income earner..if our ministers are wasting our money into the drains with some stupid projects thats not benefits us but themselves? Why not abolished TOLLs, waives all govt. taxes n service taxes, increase taxes on cigarettes n liquors..fined those illegal double parking drivers...abolish AP n Proton-cheap car price (u sell in foreigners nation cheap(their currency is bigger) but sell us double price like Indonesia..why taxes us more..made in Malaysia or Batam?) Cut salaries of MPs by 5% ..use it to lower govt. subsidies on fuel,sugar...etc.

+2

Concerned Citizen· 1 hour ago

What else is new?! Higher prices!! Lesser take home pay!!?

+9

1 KL· 1 hour ago

Poor people need to pay taxes when GST is implemented. Datuk Jala.....people first.....sudah mana pergi..?

+6

alexislim· 1 hour ago

is it the lowest in the region again? as i know our salary is low how can charge us the same rate as in singapore?

+11

wong· 1 hour ago

//1 million pay taxes//
You know the problem, why take the easy way out to impose more taxes and let the rest go without paying tax, where is the logic ? I have being paying my income tax for the last 32 years without fail, can you answer this ?

The rest of 27million peoples are taking advantage of our poor 1 million tax payers and enjoy the same benefit. Worst, we filled up the Income tax form with a little error, they penalised us with 40% of the total tax payable. Where is the logic ??

1 reply · active less than 1 minute ago

0

anu war· 22 minutes ago

wong.. that's the point my friend.. right now u and me + 1 million malaysians are subsidizing the rest of other malaysians.. with GST, the government will reduce our income tax and impose GST... GST is based on consumptions.. if u use thhen u pay.. if u dont use then no need to pay lah.. that's the whole idea.. unless if u dont mind that u are subsidizing the rest of 27 millions

+9

shaktiman· 1 hour ago

Already too many kind os taxes being paid by the Rakyat, and yet you want us to apy GST...for what? To allow Najib and the BN to simply spend our money on more Overseas Trips and donations during Elections. The Rakyat's money collected through various Taxes and Donatrions should be spent THRIFTLY and accounted for properly by all concerned.

+8

Baba· 1 hour ago

Most rakyat are straggling to make ends meet and yet the hypocrite government that sloganeering loudly ' rakyat didahulukan' is quietly planning to add more weight on our back. The only reprieve for us now is to vote it out and let the alternative coalition try a term.

+7

alexislim· 1 hour ago

never even wanna mention cut pay on the ministers or reduce expenses bu keep wanna introduce new tax.... the electrical bills and the extravangant expenses already can save alot!!!

+8

vim· 1 hour ago

Savings Not enough even to run PM office.

1 reply · active less than 1 minute ago

+2

confuse· 55 minutes ago

PM and DPMoo's official residential utility bill along can save a lot to cut nation deficit !

+11

angst· 1 hour ago

What is the point if

1) Spend 1 billion for the new palace
2) Spend money on syiok sendiri projects
3) Have one of the biggest minister cabinet in the world. Japan has half of the number of ministers in Malaysia
4) Give kak Rosmah unlimited expense account

+2

nodegreeholder· 1 hour ago

IJ, as long as the GOM does not plug the leakages, the extra revenue through a burdensome GST imposed upon the rakyat shoulder will not bear fruits in filling the GOM coffers....

Please tell me how you will "fund" the poor when the poor may not survive to be funded ?

+2

Penangite· 1 hour ago

Najib,
How about you first abolish the APs, subsidies to power companies, wasteful projects. Then improve tax collection. Curb wasteful spending like Ng Yen Yen's facebook pages. Stop the brain drain so there are more high income persons paying taxes - shut Ibrahim Ali up, treat all races equally. Help Bumiputras become more competitive - allow a more even playing field. The country does not have the resources to keep feeding this inefficiency. Show us you are serious about saving the rakyat's money before you start taxing us more.

Mr. Idris Jala,
What will happen to this beautiful country Malaysia when the oil revenue runs out? Will we go the way of Greece? I fear we will.

+2

pinky jellyfish· 1 hour ago

He shouldn't be in his position in the first place. He'll not only grab whatever is available but cause severe sufferings to the future generations.

+4

Justice· 1 hour ago

To ensure GST do not happen, kick BN out in GE13, make PR agree on GST abolishment if the rakyat vote PR to to be our government of the day. Simple!

+2

aikedi· 1 hour ago

to all BN supporters. i congratulate you for voting them. well done

+2

HonestyBestPolicy108p· 1 hour ago

Wow, tak boleh tahan. Prices already so high, lagi mahu GST tax. Poor lagi poor. That means for every trolley of food from Tesco or Giant, say RM200, I kena bayar RM8 to RM14 extra. Shop twice a month, family already short RM16 to RM28. Multiply 12 months a year, I kena GST Tax RM192 to RM336 a year. So for those who are too poor to pay any tax now, they also kena tax RM192 / RM 336 a year, not counting other things like petrol, lubricants, battery, clothing, dan lain lain. Mana boleh tahan macam ini!!! Mesti vote Pakatan, no GST mah.

+3

Forensic Auditor· 50 minutes ago

When there is a miss-match in a company's cash-flow,the first thing is to cut or reduce out-flow or cut expenditures,i.e.cut out completely wasteful expenditures,stop leakages(cut out kickbacks,corruption etc.),cut excessive nos. of staff and improve efficiency and productivity, cut out unnecessary publicity and promotion etc.etc. NOT by asking your customers to pay more for your junk goods when your customers are already complaining about your inferior products.. When your products are superior and have the lion's share,by all means increase pricing in line with inflation.
Surely,ij,you would have learned this while working at Shell,or was I wrong?

+4

Eric· 49 minutes ago

01.We suggest that the General and Administrative cost be reduced by the government by reducing the size of civil servants required. It will a shame to have more than 1.2 million civil servants to servant a population of 27M.
02. Sell part of Putra Jaya as it is oversized and under utilised.
03. Limit the expenses of utility bills and perks given to Ministers especially of PM and DPM.
04. Show us the breakdown of the Expense budget that Government has in running the country.
05. Remove all APs with immediate effect.
06. Remove subsidise given to IPP.
07. Stop using government resources like vehicles for own use.
08. Have public tenders.
09. Remove all monopolies.
10. Limit oversea trips.
11. Stop inducing voters with money on the pretext of development.
12. Because the country is poorly managed, cut 30% pay of all Ministers. If they proof that they are able to perform, reward the needy.
13. Remove all tolls or remove road taxes for all vehicles (individual and company owned.) You cannot have both.
14. Have a better standard in implementing infrastructure and maintenance of public works. It is pathetic and Rakyat has to bear the cost each year on all these.
15. Reduce corporate taxes and individual taxes. Have better perks for families who have children to take care of.
16. Stop all buildings and projects of White elephants. Create industries that spur growth and not for show.
17. Be transparent and accountable.
18. Stop bailing out cronies.

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