Posted by Unknown On Monday, March 8, 2010 31 comments
Did you know that it was only recently that our Government became more aggressive with regards to consolidating its financial position? In reality, the Government is implementing mechanisms that can reduce its persistent financial deficits and increasing burden of debt. As such, has to seek ways to develop a surplus for rainy days ahead. One of the ways is via the proposal of introducing a new tax format, called the goods and services tax (GST), or value-added tax (VAT) as it is known in some countries.

Just a few days ago at THIS LINK, Deputy Finance Minister Chor Chee Heung announced that Malaysia will see a gradual reduction in its corporate and income tax rates once the proposed Goods and Services Tax (GST) is in place by mid-2011.

The report said:

"This is a long-term objective of the government. Once the GST come into play, it will be a broadbased tax and the trend is, once GST is implemented, corporate and income taxes will gradually be reduced," he said here Thursday.

Speaking to reporters after officiating the PTD (government administrative and diplomatic sercie) Alumni Policy Dialiogue on the GST, he said, however, he did not think there was a timeline for achieving this reduction in corporate and income taxes.

Chor also disclosed that businesses related to services such as those in the food and transportation sectors, would be exempted from the proposed GST. He also assured that the cost of living and lifestyle of the people would not increase or be affected with the implentation of a GST.

The implementation of GST would not cause inflation either, he said, adding: "Once the GST is in, the service tax and sales tax (now imposed) would be abolished. Both taxes are quite high at 10 per cent and five per cent respectively. The GST at four per cent is considered very low." CLICK HERE to read more.

The GST Bill was tabled for its first reading in Parliament last December. The second reading will take place during the parliamentary session beginning later this month.

This evening at 8.00pm, PAKATAN RAKYAT PULAU PINANG will be holding a FORUM ON GST that will feature YB Tony Pua (MP PJ Utara, DAP, YB Dr. Dzulkefly Ahmad (MP K. Selangor, PAS) and En. Mohd. Rafizi Ramli (CEO of Selangor Economic Advisory Office). The forum will be held at Penang Caring Society Complex, Jalan Utama (Next to Governor's Residence). If you are in Penang, please come for this meeting to know more about GST and how it will affect you.

I am no economist but from what I have read and studied, I thought I'd share a few basic points to get us ready for GST in Malaysia.

What is GST? GST is a tax on spending that will cover all types of goods & services sold to Malaysian & non-Malaysian residents (therefore consumers) except for a common commodities such as rice, flour & sugar.

How will it affect you? In future, whenever you buy something or pay for a service (even parking fees!!!), you will be charged additional ~% (the proposed additional 4%) on top of your bill except for certain controlled items.

The rationale: More funds for development and expenses.

Estimated revenue: A whopping RM1 billion (RM1,000,000,000) per annum

Will inflation occur? Whether you like it or not, the reality is that it will affect the pockets of middle and lower income group Malaysians. Please do not forget that even without GST, the cost of living in Malaysia has increased. The prices of petrol and commodities have escalated and we are going to have GST? Our PM and Deputy Finance Minister have said that inflation will not occur. Let's be realistic. With the introduction of GST, the chain of ‘passing the cost’ will end up usually at the hands of consumers. And what will that mean? Do your mathematics and reach your own conclusion. Along the way, think of those who are poor - the unemployed, the handicapped, single parents, the elderly etc.

What about implementation? There will be a slow & steady tax preparation so that individuals and small businesses will not be adversely affected. Implementation will not occur until middle to late 2011 or 2012.

GST will replace the 10+5% services and goods tax. This means taxes are lower now – Consumers need not pay more for one area, but it’s divided into many other source of ‘tax’ payments.

GST rates are promised at 4%, out of the normal 10% or 5% charged in restaurants.

If you want to know more, come and hear it from the experts tonight at 8.00pm, Kompleks Penyayang, Jalan Utama, Penang.

In closing, here's a poem that was sent to me via email re the GST. You may laugh at it now but I foresee the situation will be much worse in Malaysia when the GST is implemented!

I am Ong Ah Tee living in Kampong Chai Chee
Life used to be simple and HAPPY
I worked hard in my STUDY
I learned A-B-C, and everything from 1, 2, and 3.
Primary school was quite easy I passed PSLE

Then I went to SECONDARY
The subjects include HISTORY, GEOGRAPHY
Physics, Biology and CHEMISTRY
After O levels I went to JC

They said you live in Singapore very LUCKY
This is a small humid tropical COUNTRY
Surrounded by unknown potential ENEMIES

Boys turned 18 must go to ARMY for the tour of duty
After that we may continue our Studies
The girls can just sit back, relax, and watch TV
They come to this world only to "lim kopi, kway jit chee
No one lives on free meals or depends on CHARITY

I want to take up IT, but I had no money to go to University or Poly
So I went to work at FACTORY
Working hard to earn a little lousy SALARY
After CPF and INCOME TAX, I have just enough money to buy ROTI and ride in MRT.

My bosses show me no SYMPATHY
Mumbling over my shoulder daily: "HURRY, HURRY and HURRY !"
Accusing me of always trying to get MC
But my sickness was due to over stretch OT
Going home after midnight by TAXI
And they pay me only bus fee

My colleague likes me because of my honesty and can easily bully
They said I don't know how to carry.
I Park-Tor and became STEADY
Finally had to MARRY
Because gahment gave baby bonus MONEY

I lost money holding Wedding Dinner PARTY
Cheeky friends donating only cheap PANTY
After marriage, nothing was EASY

In one year, I became DADDY
I can't support my family and our BABY
Being tied down for life to repay 2 rooms HDB and rising monthly
utilities to PUB
My bank account has NO MONEY
POSB balance is almost EMPTY
DBS wants to charge me EXTRA FEE
Insisting that "Nothing is FREE!"

So I moonlight as KARANG GUNI
Many times I want to jump MRT
But that is not EASY
My wife cries: "Who is going to support me and our BABY?"
So I can't MATI

I went to seek assis tan ce from the MP
His reply was simple and easy
"Vote for me, vote for me, vote for me".
He never tells me any convincing Policy.

How to help the poor with more GST?

Why I cannot have pay increase but they can have increase?
Before, my MP said "Vote for me, we give you sweeties".
Now, they want to increase salary, because "You voted me"..

They claim they made good economy for our country.
They benchmark themselves using GDP.
They said, "To get the best man, you have to pay high fee"
otherwise, they will join MNC. /
And all your 'char bor' become maids in other COUNTRY.

Next will be the GST.
My boss say "no" to increase in salary,

It's really make me worry.
Our Health Ministry said let GP set their consultation fee.
If the GP charges high fee, don't let them see.
No money, how can healthy
If fall sick, can only mati
In hospital, can afford Class C.
I don't mind all nurses are aunty,
But only one doctor to see
No money for operation, I Tan Si.

Do you think GST will benefit Malaysians? Do leave a comment if you wish to share your views about GST.Thanks! Have a nice day!


  1. says:


    What is there to know?

    Except as a "GO SQUEEZE THEM" thing and BS excuse by a wastrel and rapacious Gomen.


  1. says:


    I know nothing.
    Don't bother to know.

  1. says:

    Unknown Dear ~wits0~

    :-) You always have a way with words :-). But you are definitely aware of the hidden agenda.

    Take care and have a great week.


  1. says:

    Unknown Dear Anon @ 9.51am

    Thank you for your honest response. I hope that in due time, you will be aware of it, cos it will affect us more than you can ever imagine.

    Take care and God bless you.

    Have a great day.

  1. says:

    ahoo Govt is desperately trying out many changes in view of less taxable income due to world financial crisis. Also, the task of supporting a mega pension scheme for civil servants. They are in an unenviable position and as such needed to stretch their minds to come up with something that can bring in more taxes to the govt's coffer.

    What we should be concerned are those non tendered projects that bleeds this nation through and through. Couple with corruptions, wastages, plunderings and under handed royalties etc. etc.

    Whatever project(s) implemented for the collection of taxes, the check and balance system must first be in place to avoid abuses. The people at large are more interested in how are these billions that will be collected, accounted and spend.

    GST is just another tool for that collection agency compares to the 10% service tax & 5% govt tax. To the laymen, we may think that we are paying lesser tax via GST but in reality the entire scope could be more widespread than before. So let us hear it from those qualified AKUNTAN !

  1. says:

    Unknown Dear ahoo

    Thank you for your learned and concerned analysis of the situation. Oh yes- our nation is bleeding profusely and some don't realize, others don't care and the rot continues.

    There is definitely more that meets the eye re the GST and like you, I hope that qualified accountants and financial experts/economists can give their expert views on the matter.

    Take care and have a blessed day!


  1. says:

    Village Boy In Malaysia, it is the politicians that make the decisions.
    The rakyat have the last say, or no say at all!

  1. says:

    Kampung Girl Why is it the BN government always thinks that whatever policy it implements is perfect and is good for the people?

  1. says:

    Unknown Dear Village Boy

    You are so right. And the worst thing is, decisions made may not always have positive results :-(.

    Time to change...

    Take care and God bless!


  1. says:

    Unknown Dear Kampung Girl

    Could it be from a high-handed I know better than you do stance?

    Could it be a lack of empathy for the people?

    Or simply because the interests of others come before that of the masses?

    Only God knows....

    And they will have to answer to their Maker one day.

    Take care and God bless you.

    Have a lovely day!


  1. says:

    Anonymous GST can only be implemented effectively if the income gap is not as wide as that in Malaysia.

  1. says:

    Justice Say 'NO' to GST!

    We must never allow that to happen and to that end, we must vote PAKATAN RAKYAT.

  1. says:

    Unknown Dear Anon @ 12.54pm

    I am glad you brought that up. Thanks a lot.

    In reality, the disparity between the rich and the poor in Malaysia is very wide and the introduction of the GST would be most regressive.

    Take care and do keep in touch.

    Have a wonderful day!


  1. says:

    Anonymous Pugnacious Perkasa chairman Ibrahim Ali came out fighting, arguing that he is battling against the encroachment of Malay economic rights which is a danger to their welfare, amidst the impending liberalisation of the economy in Premier Najib Abdul Razak's soon to be announced New Economic Model.

    ~~ Malaysiakini

    Imagine a frog hopping around with his idiotic ideas!

  1. says:

    Unknown Dear Anon @ 2.53pm

    Thanks for the alert. I saw the headline in MK earlier but did not read it cos I was felt nauseous after looking at the graphic :-) but since you have highlighted it, I am reading it now, hand on my mouth :-).

    Take care and thanks again. Have a great day!


  1. says:

    semuanya OK kot There was a time when the big bad opposition was said to be parroting foreign propaganda in saying the Treasury was empty. Now, the international financial crisis is a good opportunity to change tack.

    People who raise the prices of ordinary goods and services are villified, Communist-style (remember the Kuantan restauranter who was fined) but the big-ticket items from monopoly suppliers just keep going up. Meanwhile civil servants outnumber taxpayers. The biggest threat that any of them with the proper "affiliation" faces for CBT is a transfer.

    A month ago, Dr. Fong Chan Onn gave us a lucid view of key issues, especially wages (linked to subsidies and inflation), competitiveness and genuine educational reform. It seems, however, that the dinosaurs will continue to try distracting us with "bread and circuses".

  1. says:

    Anonymous GST = Government Sudah Teruk

  1. says:

    Unknown GST is yet to be implemented next year, but we the rakyat alreay ho ha ho ha here & there. Anyway, our tone is same, goods & service price will be hike again, life will be more difficult.

    But, from our "dear" ministers view, the GST will bring down the actual tax to coporate and income tax. Service tax and sales tax (now imposed) would be abolished after GST implemented. And, GST wil not cause inflation. In this case, then the price of good and service will going down?

    Here I have some doubt that government should explain to the rakyat before implement GST.

    1) Coporate tax will be down, then who pay the tax, the rakyat?

    2) Income tax down while only 2 millions of Malaysians pay tax. If we consider the 2 millions people are the richer, then they will pay less tax to government. Will this means the other 20 over millions poorer rakyat need to pay more tax in future?

    3)If service & sales tax 10% going down with implementation of GST 4%, will the good & service price go down?

    4) Service & sales tax are normally imposed on some of the service & goods with some kind of class/standard or branded service or goods. So, with both taxes replaced by GST, all service and goods of any standard will be affected. So, even we go to a lausy hawker center, we also need to pay tax? Again, the low income rakyat will be affected.

    From what we, the ordinary rakyat calculation method, GST will cause inflation. If our "dear" ministers really care about the rakyat, they should explain in detail the method how the GST will be calculated and how will it affect the rakyat especially the poorer group of rakyat.

    Will our government do it? I doubt it because our government like to do work in black box!!!

  1. says:

    Unknown Dear Semuanya OK kot

    Your comments are always marvelous in that it is power-packed with loads of stuff for us to digest. Once again, you have alerted us to issues that concern most of us and the despair that we are likely to face if things don't change.

    Thank you very much for raising these issues and reminding us lest we forget.

    I would love to hear your views as to how some of these problems can be addressed.

    Do take care and thanks for adding scope to the topic. God bless and have a lovely evening.


  1. says:

    Unknown Dear Anon @ 4.02pm

    Very clever acronym! Thanks for sharing. Take care and have a lovely evening.


  1. says:

    Selvi Ibrahim Ali talking about national economy?
    Aiyo, don't make me fall out of my chair lah!

  1. says:

    Apa Nama Chinese will take over in the next election, warns Perkasa.

    ~~ Malaysian Insider

    Have these racial bigots gone insane?
    May God bless us all!

  1. says:

    Anonymous Economy is Crawling - Scrap the 4% GST, Idiot



  1. says:

    Kampung Girl I have so many Malay friends and colleagues who are generous, humble, good looking, intelligent, friendly and rational. But, why is it that idiotic, uncultured, crazy and ugly ones like Ibrahim Ali always get featured in the MSM newspapers?

    This racist sounds as stupid as he looks. Is he senile?

  1. says:

    Kenneth Is Perkasa "attempting to give a damn" to Najib's 1Malaysia dream?

  1. says:

    Unknown Dear Selvi

    Aiyo - My eyeballs also nearly popped out! Check out my latest post.

    Take care and have a lovely evening!


  1. says:

    Unknown Dear Apa Nama

    I think so too!!!

    Possessed by racist tendencies!!!

    What an outrage indeed!

    Take care and bless your heart.

    Kind regards

  1. says:

    Unknown Dear ~wits0~

    Thanks for the link and info...

    Seems that idiots rule in some parts of the world :-) and are talking balderdash too :-).

    Take care and have a lovely evening!


  1. says:

    Unknown Dear Kampung Girl

    LOL!!! Aiyo - I just love your witty comment!!! Rings true and you are very cute. Also, he is definitely senile and bordering lunacy!

    Check out my new post.

    Take care and God bless you.


  1. says:

    Unknown Dear Kenneth

    Sabotage, perhaps?

    Thanks for swinging by...Take care and have a lovely evening.


  1. says:

    Unknown Dear Chong

    I am so sorry I forgot to respond to your excellent comment.

    I just came back from the GST Forum and made lots of notes and will be blogging about it later or perhaps tomorrow morning.

    In a nutshell:

    a) it will be a regressive move
    b) things are not as simple as they seem
    c) 85% of our population who never paid income tax before will have to pay GST so what does that mean?
    d) with no corporate tax, you are right. the cost is passed to the rakyat
    d) with no Sales and service tax but with GST, it does not mean that prices will not go up even for goods with exemption

    You have raised BRILLIANT comments, Chong!

    I hope that you will do your part to make more campaign against GST. It is critical that we oppose this as much as we can.

    Check out my post on the forum later or tomorrow.

    Thanks for taking the time and effort to share your ideas and concerns.

    God bless you, Chong!


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