Claim that country needs GST is false, says Rafizi

rafizi-gstSUBANG JAYA: PKR vice-president Rafizi Ramli has slammed economists who support the argument that the country needs the goods and services tax (GST), saying statistics from the finance ministry say otherwise.

Last January, Malay Mail Online quoted Firdaus Rosli, a fellow of economics at the Institute of Strategic International Studies (ISIS) Malaysia as saying it was “preposterous” to entertain the idea of abolishing the GST when the budget deficit was widening again.

“I would like to know where these economists are getting their data from because I’m getting mine from the treasury,” Rafizi said.

Speaking at the launching of his book “A Guide to Rebuilding Our Nation (Vol. 1)”, Rafizi said statistics gathered from the finance ministry showed the country’s income tax collections proved to be on a par with other countries, disproving the supposed “dire need” for GST.

“The statistics show that income tax collections for the last two years has shot up. Next year, it’s also expected to go up. In other countries, it’s the same.

“So where does this argument that our revenue base is so small that we need GST come from?

“It’s a lie.”

Rafizi said it was unbecoming of professionals to give people such a wrong picture.

“I can understand if it’s coming from Ahmad Maslan (former deputy finance minister) and Najib Razak (prime minister and finance minister) because they don’t understand anything, but what about all those economists?”

Last month, theSundaily reported Najib as saying that the opposition’s promise of wanting to do away with the GST was based on political expediency and not reality.

Najib added that a strong source of revenue was important for the government, accusing the opposition of not telling the truth on the need for the GST.

The Inland Revenue Board (IRB) had collected RM114 billion in taxes in 2016.

It has stated that, ideally, the tax collection should be at 14% of the national gross domestic product (GDP). The current GDP for Malaysia is at RM1.2 trillion.

As such, IRB has targeted to collect RM127 billion in taxes in 2017, or 10% of the overall GDP.

As for GST, Malaysia hopes to collect RM42 billion this year compared with RM41 billion last year.