Irwan: GST waiver is to keep ECRL cost down

Treasury secretary-general: GST on rail project “is as if we are imposing the tax on ourselves”

KOTA BAHRU: The East Coast Rail Link project was given a waiver of goods and services tax to ensure that the construction cost remained at the original estimate of RM55 billion, Treasury secretary-general Mohd Irwan Serigar Abdullah said today.

Otherwise, the project would cost about 6% more if GST was imposed.

“The ECRL is a government project. If we were to impose GST, then it is as if we are imposing the tax on ourselves.

“We are giving this exemption as we do not want the cost to escalate which will force the government to borrow again. It is better for us to release the GST and maintain the original cost,” he said.

Mohd Irwan spoke to reporters after a special briefing for civil servants and employees of the Ministry of Finance.

Responding to a question from the audience earlier, Mohd Irwan side-stepped a claim that the government was surrendering the country’s sovereignty in allowing China’s state-owned companies to make huge investments in mega-projects such as the ECRL.

He said that foreign investment inflows last year amounted to RM39.2 billion, not only from China, but also from other countries like Germany, the United Kingdom and Japan.

“We are not surrendering the sovereignty of the country, we are attracting investments from abroad. For ECRL, for example, the company involved only builds the construction implementation system, while 70 per cent of the workers are locals,” he said.

He said the government would certainly set ECRL ticket prices so that they would not be burdensome on the people. He denied that they would be very expensive.

“Don’t believe unverified news, the government is very concerned with the welfare of the people and of course, the government will look into this matter as best as possible,” he said.

See-To: Why should government pay GST to itself?

Customs: Tax exemption also given during Mahathir’s administration