Selangor govt rejects newly implemented GST system

SHAH ALAM: Selangor government will stand firm in its decision to reject the newly implemented Goods and Services Tax (GST) because it is a "cruel" taxation system, said Mentri Besar Mohamed Azmin Ali.
A day after GST was implemented, Azmin said, GST is a regressive system which would tax the poor more as compared to the rich.
He said this when replying to Datuk Amiruddin Satro (BN - Jeram) in the state legislative assembly today.
Azmin said Putrajaya should have addressed government leakage and corruption issues, which are far more worrying, before introducing the new consumption tax.
"It is a wrong philosophy that GST would create a new source or increase the income for the country. If the Putrajaya government wants to increase their income, it should study the corruption and leakages which run into RM27 billion," he said.
While admitting GST would be a transparent taxation system in the long run, it has to be based on a basic fairness principle to the rakyat.
"The taxation system should differentiate between those who can afford to pay tax, and those who can't. It should tax those who can pay the tax. GST that is introduced by UMNO does not abide by this basic principle. Taxation should be applied on additional income," he added.
Azmin explained that although 162 countries have GST, but they adopted an approach when GST was introduced at a minimal percentage, income tax was reduced.
In Malaysia, income tax remains high and GST has been introduced at a high rate of 6%.
In Malaysia, only 10% of the workforce is taxed as 90% falls out of the taxable margin, this makes it unfair, Azmin added.
Azmin cited Singapore as an example, where GST was introduced at 3%.