By Lian Cheng
KUCHING, Oct 3: Chinese community leader Jonathan Chai believes that the federal government should revert back to the Goods and Service Tax (GST) as the tax system is a more effective and comprehensive mechanism for the government to combat tax fraud and evasion.
Chai who is the secretary-general of the Sarawak Business Federation and Kuching Chinese General Chamber of Commerce and Industry as well as the vice-president of the Associated Chinese Chambers of Commerce and Industry Sarawak said the system would also rake in more revenue.
“GST serves to provide a more effective and comprehensive mechanism for the government to combat tax fraud and evasion.
“The government could seek additional revenue through the reintroduction of GST to offset its budget deficit and reduce its dependence on revenue from Petronas,” Chai told DayakDaily.
He said he had no objection to the reintroduction of GST as it is generally perceived as a tax regime that is fair to all walks of life.
“It is implemented in over 100 countries in the world. Some people have complained that it is regressive and inequitable because the low income group and the poor will be affected.
“But the government could always provide exemptions of GST for domestically consumed items like fresh food, water and electricity and other important services like education and health.”
Chai also pointed out that if the government were to re-introduce GST, the rate of GST should be lowered from six per cent to three per cent.
“Unlike the rate of six per cent as imposed by the previous administrator, perhaps the proposed reintroduction of GST could be set at a lower rate of three per cent to curb any potential inflationary pressure in the market.
“GST is levied on most transactions in the production process, but is refunded with exception of Blocked Input Tax, to all parties in the chain of production other than the final consumer.
“Simplistically, it’s fair in the sense that if you consume more, you will have to pay more tax,” said Chai.
Earlier today, Prime Minister Tun Dr Mahathir Mohamad was reported as saying the government was wiling to study calls to re-introduce the GST if this was what the people wanted.
“If people believe it is better, we will study it.
“We will study if it (GST) is better than SST (Sales and Service Tax),” Dr Mahathir was reported saying after launching the Security and Public Order Policy today.
Removing GST was one of PH’s manifesto and signature campaign promises during the 14th General Election (GE14). It was abolished by Pakatan Harapan (PH) on June 2018, after taking over the federal government on May 9, 2018.
On Sept 1, 2018, the PH-led government introduced SST to replace GST. — DayakDaily