blogtunm.blogspot.com Tun M
1. Najib’s apologists have tried very hard to justify the GST. The Government collects more than forty-billion Ringgit from GST last year. And more will be collected in the coming years.
2. Unlike income tax, GST is not based on profits. Even when no profits are made or losses incurred the 6% GST must still be paid. It adds to the cost of doing business.
3. The G.T is paid up front. Naturally businessmen will pass on the tax to the consumers. The price of goods and services will have to be raised and this results in inflation. The cost of living would go up. And it has.
4. Effectively the GST is paid by everyone. Even a baby consuming milk would be taxed.
5. Some items might be taxed twice as GST is collected with each transaction. The Government promises to reimburse the tax paid if it is shown that the tax has been paid twice. But this is a slow process and may take months or years. The rebate will not be passed on to the consumers.
6. The reasons why Najib’s Government does not have enough money is because of his abuses in the management of Government funds to gain popularity for himself.
7. BR1M for example costs the Government seven billion Ringgit or more a year. Then there are other handouts such as RM300 for fishermen, RM800 for party members who are chairman of JKKK (Village Development Committee), thousands for Hajj Pilgrims, pensions for retirees not eligible for pension, etc.
8. The emoluments for civil servants have been revised frequently, sometimes by 25%. In addition the number of Government employees has increased to 1,600,000 from the 1 million in the 1980s. This will cause the salary bill to double or more.
9. The increase in minimum wage increases the salaries of all workers at all levels in the Government as well as the private sector. From about RM700, minimum wage has increased to RM1,200 – almost double. When the minimum wage is increased those already receiving more than the new minimum must be increased also. This is in order to sustain parity between different levels or ranks of the employees.
10. Najib also sets up numerous extra Governmental organisations. PEMANDU is a good example where huge salaries, well above the Government’s pay scale are paid to the heads and the staff. New posts are also created in and outside the Government which do not conform to Government’s salary scale. How much they are paid is not known.
11. All these people who financially benefit from Najib’s largesse may be happy. But actually, the increases in their income benefits them very little. This is because the increases of their pay invariably cause a rise in the cost of living. In other words, the increase in pay does not increase the purchasing power.
12. It is not how much one is paid that is important. What really matters is one’s purchasing power. When cost of goods and services increases the extra income that one gets is quite meaningless.
13. We all know of countries where the pay is in millions but they are all poor because of the depreciation in purchasing power of their money. A country can fail and become bankrupt where workers are paid thousands or even millions every month.
14. During Najib’s premiership crude oil sometimes sold at USD130 per barrel. Petronas paid billions to the Government when petroleum prices were high. Now oil prices have come down to USD50 per barrel. Even then it is higher than during the 80s and 90s when oil was selling at less than USD30 per barrel. So at USD50 Government oil profits and taxes would still be much more than in those years of low oil price.
15. The same goes for profits made by banks and large businesses. It is not unusual to see them make billions of Ringgit in profits p.a. And accordingly the Government must receive much more money by way of petroleum profits and taxes and corporate taxes even today.
16. For all these reasons the Government of today must collect more than was collected in the 80s and 90s. But the Government claims it had to introduce the G.S.T because it is short of funds.
17. The truth is that Najib’s regime is abusing Government revenue by spending huge sums to get popular support for Najib.
18. One of the highest contributor to the shortage of fund is the loans taken by Najib. There is a ceiling to the loans that the Government can raise. But Najib resorted to borrowing by a Government company – the 1MDB, which is not limited by Government rules.
19. Although 1MDB is not a part of the Government, the fact is that it is 100% owned by the Government. This means that if the loan is not serviced or repaid, the Government will have to pay the loans and interest.
20. And so when 1MDB lost money, Government had to take over the company and pay the interest and the loan.
21. It is the same with the 55 billion Ringgit for the east coast Railway. Altogether it is estimated that Najib has borrowed almost 200 billion Ringgit. Some of the loans carry interest rates of 6%.
22. Assuming the average interest rate is 3%, the Government will have to pay 6 billion yearly in interest alone. Paying the principal will cost more billions. It may take two generations to settle all the loans.
23. For servicing and repayment of the loans Najib has resorted to buying Government land at a low price, revaluing it and selling the land at inflated prices.
24. For land at TRX (Tun Razak Exchange) 1MDB paid only RM60/- psf to the Government. It was sold at RM3,500/- psf to Tabung Haji. So the savings of poor people for performing the Hajj have given 1MDB very high returns.
25. The Airforce base at Sungei Besi was also sold by Najib, as were land in Melaka and Pahang.
26. Still the money raised through these land sales will not be able to service and repay loans. So money from normal Government revenue must be used. There will not be enough money in the Consolidated Fund. The next source would be to tax the people. And so the GST.
27. It is true that KWSP, with billions of Ringgit, will have difficulty in investing within the country. It should invest in good foreign companies. But the decision to invest in any company should be based on business considerations. It should not be influenced by political imperatives.
28. But clearly the KWSP is being forced to invest in the United States to please Trump and Najib’s need to have pictures of himself with Trump to show that what the American Department of Justice says about him is not true. But the DoJ has not stopped the investigation on Najib’s involvement in money laundering in the U.S.
29. If the Government wants to reduce the huge deficits every year, what is needed is to get rid of the belief that money can buy popularity. It cannot. It has only made the Government and Najib more unpopular.
30. All those things which increase the cost of governance should be dropped. The 1MDB money can be recovered as we know where the money is. Najib will not do this as it means surrendering all the money he has taken. Rosmah Mansor, Jho Low and Riza Aziz and others who has got the stolen money must also surrender. Najib cannot get the money frozen by the Governments of Singapore, the U.S. and Switzerland. There must also be quite a lot in the U.K. as well. The frozen money will not be returned until Najib who stole it is no longer the head of the Malaysian Government.
31. BR1M should be converted to unemployment benefit for the hardcore poor. Most of the present recipients can afford to do without BR1M. The actual amount of support for hard core poor should be raised and paid every month, not once a year.
32. The waters surrounding Malaysia should be patrolled by the Malaysian police, the Maritime Agency and the Malaysian Navy to prevent foreign fishermen from intruding into our territorial waters. With this the Malaysian fishermen would catch more fish and earn higher incomes. The RM300 allowance can be stopped.
33. Various other allowances to all and sundry should be revised or stopped.
34. Pay increases for Government servants should not be accompanied with inflation. There are ways of doing this.
35.If the Government is prudent in the management of Government funds, there should be no shortages. The need for new taxes can be avoided.
36.The GST is really not necessary for Malaysia. It can be abolished without affecting the revenues of the Government and without creating a burden for the people.
