Consumer groups also say Putrajaya should do homework, consult public before subjecting more items, especially necessities to the goods and services tax.
PETALING JAYA: An opposition party has called for Putrajaya to form a national committee to oversee any changes to the GST to ensure the welfare of the people is always protected.Commenting on yesterday’s events – which saw an order for the imposition of GST on some 60 food items cancelled – Parti Warisan Sabah said a national committee would be the best way to ensure the GST was implemented fairly.
Intitally, it was reported that the government would subject the 6% GST on some 60 food items including bihun, spinach and potatoes, only for the customs department to announce the cancellation of the order less than 24 hours-later.
Warisan vice-president Junz Wong said that for now, the GST was to here stay, whether people liked it or not and what was important was that the tax wouldn’t be imposed on basic necessities.
“Yesterday, Malaysians were given a ‘mini-heart attack’ with the initial announcement, and though the move was reversed, it has made us relook at how the GST is implemented.
“Who initially decided that bihun and potatoes should be subject to GST? What is the process of deciding what is taxable and what isn’t?” Wong said, adding that based on the current list of exempted items, there are improvements which can be made but we need to know how we can do this.”
Wong said this was why it would be good for the government to set up a national committee, comprising the relevant ministries, consumer associations, economists, academicians and representatives of state governments to improve the implementation of the GST.
He said such a committee can refine the list of items which were GST taxable, zero-rated and exempt to better protect the interests of the people.
“I think it is quite clear that some people are out of touch with the realities faced by the rakyat, so this committee would be ideal to ensure that those who don’t understand the people, don’t get a free hand to make decisions which affect the lives of struggling Malaysians.
“This national committee can make recommendations, including removing items consumed by the elite, such as lobsters, off the zero-rated supply list or considering lowering the GST rate for food items which are consumed more by the lower income group.”
In the past, some have questioned why luxury food items like lobsters were zero-rated, when they were consumed mostly by the higher income group.
In 2015, during the Permatang Pauh by-election, PKR even hosted a “lobster party” to show the people that “expensive” lobsters were GST exempt but sardines and instant noodles were not.
Wong added that the committee would also serve to obtain feedback from the public and advise the government on future amendments to the GST, including on any increase to the GST rate.
Last year, rumours were rife that Putrajaya would increase the 6% GST rate, but this was dismissed by Second Finance Minister Johari Abdul Ghani who said there would be no such increase in 2017.
Consumers associations
Meanwhile, prior to the cancellation of the GST order on the 60 food items, consumer groups called for Putrajaya to engage the public when making decisions on the GST.
Consumer Association of Penang (CAP) president SM Mohamed Idris said Putrajaya needs to be more transparent when it came to updating the list of zero-rated and exempt items and that it must come with sufficient consultation.
Idris also called on Putrajaya to tell the people how their money was being spent, especially if they had to pay GST on basic necessities.
“Show us where our GST money goes and how every sen is spent,” he said.
In the past, the government declared that revenue from the GST – which has been described by Prime Minister Najib Razak as a “saviour” of the economy due to lower oil prices – will be used as development expenditure.
For Federation of Malaysian Consumer Associations (Fomca), any move to impose the GST on basic food items is unacceptable.
Fomca CEO Paul Selvaraj said that fresh food items shouldn’t be subject to GST unless it was a luxury food such as lobsters.
“Engage housewives, go down to the markets and carry out consultation with the public to try to understand what the ‘Average Joe’ eats. The government must make sure that the people aren’t burdened,” Selvaraj said.
The government introduced the GST in April 2015 in the form of a 6% tax on goods and services. Putrajaya has collected over RM50 billion in GST revenue since its inception. -FMT
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