Waive GST for affordable housing, Penang urges Putrajaya

Jagdeep Singh Deo says if the tax is waived, the money can be used to build more units of affordable housing for those in the lower income group.

GEORGE TOWN: The Penang government is urging Putrajaya to waive the goods and services tax (GST) for the provision and maintenance of housing for the lower income group as well as financial assistance for the construction and maintenance of places of worship.

State housing and town and country planning committee chairman Jagdeep Singh Deo said the tax had unfairly affected efforts by state governments, including Penang, in the three areas.

“It is very disappointing to note that efforts to assist the lower income group in accessing housing, in maintaining their housing and assisting places of worship are being subjected to this tax,” he said in a statement.

On the provision of low cost, low-medium cost and affordable housing, Jagdeep said the state government presently had 18 projects which would see 27,306 units delivered to Penangites.

He said he had been informed by the Penang Development Corporation that 11 of the 18 projects would be subjected to GST, at an estimated total of RM163 million.

“It is a phenomenal sum. This does not include the remaining projects by the Penang government and the other low cost, low-medium cost and affordable housing projects being undertaken by the private sector in Penang.

“Clearly, this staggering amount should be waived as our efforts to ensure the provision of such low cost, low-medium cost and affordable housing are to assist the lower income group.

“Further, if the imposition of this tax is waived, the savings can be used to build more units of such housing in the interest of the lower income group.”

Jagdeep added that the maintenance programme undertaken by the state government towards such housing was also subjected to GST.

The Datuk Keramat assemblyman said since 2010, the state government had spent RM30.6 million maintaining its 50 public housing schemes.

Under its maximum 80% maintenance fund, meanwhile, it had spent RM21.5 million since 2013 maintaining such housing.

“Out of the total RM52.1 million, it is estimated that GST at 6% would be a staggering sum of RM3.12 million.

“Clearly again, if this tax is waived in such maintenance programmes for the benefit of residents in low cost, low-medium cost and affordable housing, the savings can be used for more such maintenance programmes for such housing schemes,” he added.

According to Jagdeep, a GST waiver would also save the state government RM2 million which could be used to facilitate and assist more non-Muslim places of worship (Ribi).

Under the chief minister’s portfolio, he said, some RM30 million had been expended for this matter.

“Further, under my portfolio, there exists a Ribi fund whereby to date, some 104 applications have been approved totalling some RM3.8 million.

“An estimate of GST imposed on such assistance rendered to such Ribi, namely RM33.8 million, proves to be some RM2 million.

“Again, if this tax is waived, there would be savings of some RM2 million which could be use to facilitate and assist more RIBI.”

Yesterday marked the third anniversary of the consumption tax which came into force in 2015.

Pakatan Harapan, in its election manifesto, has promised to abolished the GST if it takes Putrajaya in the 14th general election.