Silver lining behind GST cloud

IT has been almost two and a half years since the Goods and Services Tax (GST) was introduced in this country. We are now paying tax in accordance with our own consumption pattern.

Although the GST has been unpopular, many economists consider it as the most efficient way of widening Malaysia’s tax base.

Since its introduction in April 2015, we have seen a sharp increase in the prices of goods and services, and the effect is being felt today, especially by the B40 segment of the population.

It was rather unfortunate for the Government that during the GST introduction period, various unexpected elements further aggravated the cost of living problem, including the decline in the value of the ringgit which caused our imports to become more expensive.

The Malaysia Consumers Movement (MCM) commends the Domestic Trade, Cooperatives and Consumerism Ministry (MDTCC) for responding swiftly to complaints from consumers of price increases by invoking the Price Control and Anti Profiteering Act.

The proactive action by the ministry’s enforcement divisions, which warned businesses against flouting regulations, appears to have worked well on established and reputable businesses but more needs to be done to check on smaller businesses, especially those that serve the daily needs of consumers.

While it is unfair to blame the GST for the high cost of living, it is rather unfortunate that interested parties have continuously used the tax as an issue to attack and discredit the Government.

MCM believes this is unfair because if this tax system is indeed bad, more than 160 countries around the world would not have implemented it, the latest being India.

We continue to hear pledges to abolish the GST but would this not be an irresponsible move, especially after millions of ringgit have been invested in its introduction?

Should the Government continue to depend heavily on revenue generated from oil and income tax alone? How would the Government fund development without a sustainable tax revenue?

The GST has proven to be a boost to the country’s revenue base as was clearly demonstrated during the recent decline in oil price. What we need to see happening is not the abolishment of the GST but the efficient management of the revenue collected by plugging leakages, and equitable distribution of resources especially to improve the living standards of the B40 segment.

While the Bantuan Rakyat 1Malaysia scheme (BR1M) is commendable, we need a more sustainable social security mechanism to ensure that long-term benefits are felt and enjoyed by the rakyat.

As for consumers, let us review our own consumption patterns to ensure we minimise leakages while stretching every ringgit to maximise its value.

DARSHAN SINGH DHILLON President Malaysia Consumers Movement