Tuesday, March 17, 2015

Malaysia not ready for GST, Ku Li tells Putrajaya

BY JOSEPH SIPALAN
People buying new cloth, scarf, and food at Pasar Tani Kuala Besut. Ku Li claims that Putrajaya has not been forthcoming with the real reason for pushing implementation of the tax regime, despite the fact that Malaysians rank as having among the highest levels of household debt in the region. — File picture by Saw Siow Feng


People buying new cloth, scarf, and food at Pasar Tani Kuala Besut. Ku Li claims that Putrajaya has not been forthcoming with the real reason for pushing implementation of the tax regime, despite the fact that Malaysians rank as having among the highest levels of household debt in the region. — File picture by Saw Siow FengKUALA LUMPUR, March 17 — Putrajaya must defer its April 1 plan to implement the Goods and Services Tax (GST) as Malaysians are not yet able to handle the added strain on their finances, senior Barisan Nasional MP Tengku Razaleigh Hamzah said today.
The Gua Musang MP claimed that Putrajaya has not been forthcoming with the real reason for pushing implementation of the tax regime, despite the fact that Malaysians rank as having among the highest levels of household debt in the region.
“The rakyat have the right to know whether GST that will be implemented this coming April will benefit the country or is merely to pay interest to lenders and bondholders,” he said when debating the Royal Address in Parliament.
“The purpose of GST implementation should not be made a secret. If this additional burden is placed on the rakyat without due reason we are being unfair,” he added.
Last October, Razaleigh proposed in an open letter given to all MPs that GST be deferred in view of what he described as the “critical” state of the economy and household debt.
In his speech today, the former finance minister maintained that the situation has not improved, though he conceded that the House could carefully consider going ahead with the consumption tax if there is good reason.
“We must remember that household debt is officially at 87.4 per cent (of gross domestic product) and is admittedly the highest in Asia.
“We are also burdened with corporate debt and should be concerned with this issue. Unfortunately we do not have a true understanding of this problem due to the lack of transparency.
“Whatever the case, the amount of household debt, national debt and corporate debt should worry us when speaking of the future,” Razaleigh said.
The senior Umno leader said the onus falls on Putrajaya to be transparent about the extent of the nation's debt.
He said this would in turn enable MPs to fulfill their responsibility of making sure that the country's income is used for the interests of the people instead of just servicing interest on loans and bonds issued.
“As members of the Dewan Rakyat we are also responsible for making sure all guarantees, financial instruments and letters of comfort that burden the rakyat with debt are tabled in this hallowed House.
“This will enable us to evaluate with full responsibility whether or not it is fair to continue to burden the rakyat,” Razaleigh said.
- See more at: http://www.themalaymailonline.com/malaysia/article/malaysia-not-ready-for-gst-ku-li-tells-putrajaya#sthash.VAx6ffQR.dpuf

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