Press Statement By Penang Chief Minister Lim Guan Eng In Komtar, George Town On 23.9.2016.
The Customs Department stated that the government remains confident of achieving the RM39 billion Goods and Services Tax (GST) revenue target this year despite a 30% decline in collection in the second-quarter of 2016 (2Q16) from RM10.2 billion in 1Q16 to RM7.1 billion in 2Q16. The RM 3.1 billion drop(30%) in GST collection for the 2nd quarter of 2016 proves that the GST had resulted in the rakyat facing poorer business and less income, until the 4% economic growth in the 2nd quarter has no positive benefit to the people.
Clearly the Federal government will face a shortfall in the expected revenue of RM39 billion as they have only collected RM17.2 billion from GST for the first half of this year, way below the targeted yearly revenue of RM39 billion. Petronas will only be paying RM16 billion to the government this year, half of the amount contributed before the drop in global oil prices.
The Federal government should not try to cover the GST revenue shortfall by victimising businessmen in the form of tax investigations to squeeze more money for the BN Federal government. Many businessmen have complained of unreasonable demands and double-standards of the Internal Revenue Service(IRS), when the IRS failed to do the same on BN politicians receiving huge donations.
Worse, GST is also imposed on state governments and local government carrying out public works projects such as roads, drains and community halls even though it is not for profit but for the public benefit of the rakyat. This unnecessary cost has only imposed a greater burden on the state and local governments. For example, the Penang state and local governments as well as state agencies have to pay RM48 million yearly in GST to the Federal government.
Since the BN Federal government likes to sing the praises of GST because it is inplemented by many developed countries, then the BN Federal government should emulate their example of distributing the GST collected back to the states. For example, in Australia any GST collected in a state is fully returned back to the state. Here in Malaysia, state governments not only do not get a single cent of GST collected but have to pay GST.
There is no need to implement the GST if the Federal government takes firm and decisive action against corruption. The Federal government ran out of money because of corruption scandals such as 1MDB and the RM4.2 billion donation scandal.
LIM GUAN ENG