We Don’t Need The GST To Boost Revenue (24 December 2009)

Interesting points raised in the Star Newspaper (VIEWS section,  N53) on 24 December 2009 opposing the implementation of the Goods and Services Tax (GST) in Malaysia:-

We don’t need the GST to boost revenue

The additional RM1bil revenue said to be derived from the proposed GST is not enough to cover the shortfall in government revenue caused by the excessive budget deficit.

Are the Sales and Service Tax (SST) and excise and customs duties going to be abolished altogether? Will this also include the abolition of high taxes we have to pay when buying new cars, beer, cigarettes, etc?

Every year, Parliament passes billions of ringgit in the Budget. The most important question to be asked is, where does all this money go?

How is it accounted for? What about Petronas’ accounts? The rate of the GST at 4% is ridiculously lower than the present service tax of 5% and the sales tax of 10%!

In no time, the rate of the GST will have to be increased to more than 10%! Otherwise, it will be a loss for the Government. But the middle and lower income groups will definitely suffer more.

Here are my suggestions on how to increase revenue without the GST:

1. Reintroduce death estate duties. There are many millionaires and billionaires out there today.

2. Revert to the old system of assessment of files by income tax officers, which is more effective than the present system whereby all return forms are centralized and sorted out by a private contractor who is paid billions. What a waste here!

3. The present SST under the Customs Department should either be privatized or corporatized for more efficiency, besides weeding out inefficient officers and directors.

At present, how many good and efficient officers are there in the SST division? Good ones are “cold-storaged” or “framed”.

The transfer and pricing of officers in the SST division are determined by outside syndicates (which also includes some accounting, secretarial and management firms, part-time bookkeepers and accounting clerks, agents, and retired directors and other officers) in collaboration with some officers, bosses and directors.

These syndicates are so good to the extent of using politicians, FMM (Federation of Malaysian Manufacturers) and the anti-corruption agency (ACA/MACC) to “finish” off good and efficient officers who go by the book!

The commonly used “weapon” is that “the officers came to cause inconveniences because they wanted money, thereby jeopardizing their businesses and indirectly sabotaging the country’s economy”! Then these strict officers would be transferred out of the SST division immediately!

That is why there are still so many illegal manufacturers out there who are unlicensed and pay no taxes! How many billions in taxes are in arrears and have still to be collected?

What about the billions of ringgit in raw materials bought with exemptions from sales tax that have been abused all this while? Have they been investigated?

How many have been prosecuted for not having a license, not paying taxes, evading taxes, underpayment of taxes and not submitting the return forms? The same goes for the service tax.

In fact, a lot of sales tax manufacturers are saying that Customs officers (whom they collaborate with, including the directors) are very stupid and do not know how to work.

Yet, these very “stupid” officers laugh their way happily to the bank, profiteering through evading the payment of sales tax. Many own big luxury cars, houses and other property.

4. If Members of Parliament are sincerely concerned about the welfare of the rakyat, they must vote against the implementation of this GST.

5. Also, the absolute power of the Minister of Finance to remit or cancel the taxes (SST) should be abolished. All appeals can go only through the SST Tribunal or the High Court.

If this SST division were to be corporatized or privatized, and staffed with first-class personnel and bosses, the present revenue from SST can be increased by more than 500 times! This is no fairy tale!

 

TAX ACCOUNTANT,

Malacca.”

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