Mahathir’s proposal to abolish Goods and Services Tax makes no sense

By
 |Jan 15, 2017
Mahathir at the launch of Parti Pribumi Bersatu Malaysia on Saturday night. Photo from Malay Mail Online
Mahathir at the launch of Parti Pribumi Bersatu Malaysia on Saturday night. Photo from Malay Mail Online

At yesterday’s Parti Pribumi Bersatu Malaysia (PPBM) launch, despite saying that introducing a new tax called Goods and Services Tax (GST) has caused inflation and menyusahkan rakyat (brought hardship), Mahathir Mohamad says he will abolish GST and in its place, he will introduce a new sales tax with a different name.

Firstly, the one-off spike in inflation for GST is already over. It will not be used as an excuse again by merchants to increase price.

If you abolish GST and introduce a new tax, it will certainly be yet another excuse for merchants to increase prices and spike inflation again.

Do you really think prices will come down after they abolish GST and introduce a new tax? Of course not.

Merchants will use this as yet another excuse of a new tax to increase prices again.

Secondly, sales taxes are ancient and 95 per cent of the majority of countries have already moved to the more modern GST/VAT (value added tax) to combat tax evasion, mitigate the illegal “black” economy and to reduce illicit outflows.

Moving back to sales tax just allows his cronies to resume tax evasion and engage back in illicit outflows.

What kind of party would move back from a modern tax system to an ancient tax system already rejected by the modern world?

For years, Mahathir also frequently attacked 1Malaysia People’s Aid (BR1M) and alleged that it is corruption and a bribe that would make people lazy and over-dependent on the government.

But now he says BR1M will be retained and put into statutory law.

So, he wants to put into law a system that is corruption and a bribe that would make people lazy and over-dependent on the government?

The fact that there are some people who had cheered Mahathir and agreed on every word he says despite the multiple U-Turns shows that Mahathir and parti Cap Bunga supporters have backward thinking and simply not too smart.

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LSS is a prominent blogger who believes in writing truthful and constructive articles.