With GST gone, the rich can evade tax again, says Najib

The GST was zero-rated before its repeal last week. (Bernama pic)

PETALING JAYA: Former prime minister Najib Razak has again defended the GST, saying it was difficult for the rich to evade tax under the now-abolished tax regime.

He said the era of “black economy” would now make a return under the sales and services tax (SST) which the Pakatan Harapan (PH) government said would replace the GST.

“Under the GST, rich businessmen and black economy could not evade taxes or take part in the illegal outflow of funds from Malaysia as they had done under the SST,” he wrote on his Facebook page today.

The PH government zero-rated the goods and services tax after winning the May polls. Last week, the motion to repeal the GST Act was passed in the Dewan Rakyat, three years after its implementation.

Najib said the GST enabled the government to tax the rich as it was a consumer tax.

“Under the GST, we were able to increase our tax collection from the rich as they were spending more than the poor who were given many exemptions,” said Najib.

He said the increased revenue from the GST enabled the government to raise civil servants’ salaries as well as implement minimum wages.

Najib said his administration’s policy to raise salaries was among the reasons that Dr Mahathir Mohamad opposed him.

He said Mahathir had always argued that salaries in Malaysia were among the highest in the Asean region, and had warned that higher wages could scare away foreign investors, who would move their factories out of the country.

But Najib said the low wages of Malaysians should not be exploited by foreign investors.

“They can go if they want and we can replace them with industries and investors who offer better wages for Malaysians,” he said, adding that his government had focussed on increasing the people’s income.

He also said the loss of revenue from the GST meant that the government could no longer implement minimum wages for civil servants, as well as undertake programmes to help the poor.

“I hope the ‘New Malaysia’ is not only for the rich and the businessmen,” he said.