LANGKAWI: Former finance minister Daim Zainuddin today questioned the government’s decision to waive the goods and services tax (GST) on the RM55 billion East Coast Rail Link (ECRL) project, saying the argument that it was a government project was unacceptable.
“The people are asking, ‘Why am I paying GST? I am paying, but the government does not seem to care’.
“The government just says, ‘Oh, you must pay’. But these people are business people. They will make money anyway. But you still waive the GST for them,” Daim told reporters after attending a forum here.
Opposition leaders have recently criticised the exemption granted to China Communications Construction (ECRL) Sdn. Bhd. under the Goods and Services Tax Act 2014.
But Customs director-general Subromaniam Tholasy said the exemption was nothing new, and said similar exemptions had also been given to state projects during Mahathir’s administration.
“We must remember the ones who receive the benefit are our own people, not the Chinese company. We should understand the GST mechanism,” said Subromaniam on Thursday.
Treasury secretary-general Mohd Irwan Serigar Abdullah had said the waiver would ensure that the construction cost would not go beyond the estimated RM55 billion.
But Daim said the explanation was not acceptable.
“What is the reason? To reduce cost. Then people will ask, what about my cost? I am also suffering,” added Daim, who served as the finance minister under Dr Mahathir Mohamad.
He said by saying the cost of the project without GST was RM55 billion, the government was suggesting that the cost was much higher.
“They are telling the rakyat, it is really more than RM55 billion. But we absorb the GST,” he said.