YOURSAY | GST has no effect on corruption

YOURSAY | ‘Poor economic management creates low-income nation, which breeds graft.’

COMMENT | GST will help fight corruption, among other things

E Kumar: India is one of the world’s most adept practitioners of the Goods and Services Tax (GST) system, with rates up to 28 percent. Yet India continues to be amongst the most corrupt countries on the planet according to the Corruption Perceptions Index, with Malaysia faring no better, of course.

GST ensures a more thorough taxation system which simply means more income for the government, but it has almost no effect on corruption, especially in third-world or developing countries like ours.

Poor economic management resulting in a low-income nation is what causes corruption. The implementation of GST simply means that those practising corruption will just get more creative - it will not stop them from doing it.

The author is wrong in his observation that the reason the implementation of GST died prematurely in Malaysia was because of strong lobbying from corrupt agents.

The reason it ended was because the B40s and the M40s suddenly had to pay more for their daily essentials and they just couldn’t afford it. Burdening a nation with GST when almost half the country is still categorised as B40 is not the answer.

There are better solutions, but this government must be willing to listen to all sides, not just those within their immediate circle. Some questions to ponder:

1. Will GST make the government richer? Yes.

2. Will GST end corruption? No.

3. Will this government use the additional income from GST wisely? Time will tell.

4. Is now the right time for GST or removal of subsidies, for that matter? No. Just no.

OrangePanther1466: Reintroducing GST when half the country still depends on subsidies to get by is foolish. You need to fix the income level first. Get the B40 equivalent to 12 million people out of subsistence level into the middle-income strata.

China did that for 800 million people over 40 years. We should take less time as we are talking of 12 million only.

Support the private sector to grow their businesses and create jobs. Employ technology to drive higher value-added manufacturing.

Forget about politics for a while and think about the people for once. With good-paying jobs available at home, why would a Kelantan youth come to the Klang Valley for work?

Farming will help ensure food security. We should come up with a comprehensive master plan to consolidate paddy fields, for example. Later, introduce extensive mechanisation to reduce labour input and shorten the harvesting cycle.

Similarly, plantation crops like oil palm, durians, pepper, cocoa and rubber, among others, be consolidated into economical units and employing technology in planting, nurturing, and harvesting.

Fishing, too, can be organised into larger economic units sufficiently capitalised to invest in large modern trawlers capable of going further out into our economic zones and staying longer to fish.

We need radical ideas and ways of thinking to move ahead. For instance, the farmers or fisherfolk who previously worked for themselves could now be employed by the umbrella corporation.

This could be acceptable to them as they will have a steady income with social protection like the Employees Provident Fund and health insurance.

As for the corporate investor, they will have economies of scale to become profitable and will probably operate in an oligopolistic environment with a handful of competitors only.

An expanding economy can only benefit the government as more people and entities become taxpayers. Subsidies can then be rolled back, and we may find that implementing GST is not so appealing anymore.

Just because many countries have adopted GST does not make it suitable for Malaysians. There are other more important aspects to address first.

Coward: The strength of GST is that it is more difficult to evade. The main weakness of GST is that a lot of work must be done for the same amount of tax money.

Tax on consumption is good, but GST disproportionally affects the low-income group more because they spend a larger percentage of their income on consumption, and I mean on necessities, not luxury handbags.

This is the part that needs careful planning to ensure minimal impact on them.

In Malaysia, we must guard against politicians inserting their private interests in the implementation. For example, in the last GST implementation, computerised accounting was made necessary.

That is an unnecessary condition because VAT (Valued Added Tax) had been imposed overseas before computers were a thing. It is imposed so that interested parties can profit by controlling access to what solutions become government-approved solutions. This must not happen again.

Apanama is back: Currently, there are 160 countries (out of 195 countries) in the world that have implemented VAT/GST. They can't be wrong because they could be managing the tax collection in the correct manner.

This is not what the convicted felon (former prime minister Najib Abdul Razak) did during his tenure. He treated the GST collections as his piggy bank.

GST is indeed a very good tax collection and revenue for our country that will not be depleted as natural resources. The previous implementation made it unpopular and created a phobia among the masses.

Prime Minister Anwar Ibrahim should introduce it back to increase our country’s revenue. So far, I have not read or heard about how he is going to increase and sustain our country’s revenue.

Several days back, even the World Bank had commented about our country’s revenue, saying our existing tax collections are low.

The country cannot be run by having populist moves. Such moves include the PM not taking his salary and the cabinet members proposing a 20 percent salary cut. Populist moves are not revenue!

Previously, I had commented on how we can implement GST by having several low-rate taxes covering our goods and services while giving exemptions to our B40s.

For example, look at India where two-thirds of the population is at the bottom of the pyramid. They have different VAT rates. We cannot go for one rate across the board with an exemption given to B40s.

We need different rates to increase the country's coffer. How are we going to service that trillion-dollar debt besides lamenting about it every now and then? Action please.

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