Saturday, March 28, 2015

MALAYSIA:::MTUC pleads for a postponement of the GST

PETALING JAYA: The Malaysian Trades Union Congress (MTUC), today officially announced their opposition to the implementation of the Goods and Services Tax on April 1, arguing that the new taxation system would affect low wage earners who were already struggling to cope with the increased price of goods in the market.
“40% of workers are receiving less than RM2,000 as their income (per month). 65% of families get less than RM3,500 per month.
“These are the groups … that are going to be affected very badly by the GST,” its Secretary-General Gopal Krishnam Nadesan told a press conference at the MTUC headquarters here today.

Gopal Krishnam explained that these groups tended to spend every ringgit they earned on necessities, and did not enjoy the luxury of putting money aside as savings.
He said that after the implementation of GST, these families would require up to RM200 extra just to maintain their current spending habits.
“It is difficult to even get a second job for extra income, due to the over-saturation of cheap foreign labor in the market.
“Back in the day, you could walk into a shopping mall to get part time work, but it is very difficult today,” he explained.
Another grouse voiced by Gopal Krishnam was the “input tax credit” mechanism that he said was unfair because consumers end up paying more for goods because of it.
“Besides that, 89% of households in Malaysia that were not paying income tax due to low wages are now being taxed this way.
“What’s worse is that they won’t even enjoy the benefit of the lowered income tax which was one of the counter measures to the GST,” said Gopal Krishnam.
The government’s lax control on the prices of goods will magnify the burden of low income earners said Gopal Krishnam, adding that the implementation of this new tax should be deferred until wages were increased nationwide.
“We have seen that when sugar went up by 20 sen per kilo, the teh tarik at mamak shops went up by 20 sen,” he said.
MTUC’s Deputy President, Abdullah Sani Abdul Hamid meanwhile told FMT that despite Deputy Finance Minister, Ahmad Maslan’s assurances that the GST was a progressive tax, it affected everyone.
“Although it is said that it’s only a 6 per cent increase, GST will without a doubt have a bigger hike effect on the price of goods.
“What’s extraordinary is that everyone (traders, producers) are getting a rebate, except for the workers,” he said.
Abdullah Sani, who is also Member of Parliament for Kuala Langat, reiterated that even if nominal wages saw an increase in Malaysia, it may not completely solve the problem as the burden on households may remain the same.
Gopal Krishnam added that MTUC would meet on March 29 to determine the next course of action in their pursuit to stall the implementation of GST.
“We are urging the PM, as this is not the right time to impose GST, to defer it, and discuss with various stakeholders, to resolve the problem ahead of us,” he said.
MTUC argues that the new tax system will gravely affect the lives of “vulnerable” low income earners, some of whom only earn RM2,000 a month

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