Affluent households in Malaysia paying more towards GST

Affluent households in Malaysia paying more towards GST

Those with a monthly household income of RM2,000 (S$717) and below paid RM51.89 per month - or 2.59 per cent of their earnings - under the Goods and Services Tax (GST) implemented from April 1, said the Finance Ministry.

Under the previous Sales and Service Tax (SST), they only paid RM36.83 or 1.84 per cent of their monthly earnings.

Finance Minister Datuk Seri Najib Tun Razak said the study also showed that those earning RM8,000 paid RM290 - 4.14 per cent of their monthly income - under the GST as compared to RM168 (2.8 per cent) previously.

"Based on this study, it is not true to assume that the lower income group is paying more than those in the high income bracket once the GST came into place.

"In fact, those in the high income group will pay more as they spend more on goods and services im­posed with GST. This shows that the GST model is progressive in nature," he said in a reply to Oscar Ling Chai Yew (DAP-Sibu).

However, Najib said the country's inflation rate was expected to rise between 2 per cent and 3 per cent this year, adding that the Government was focusing its attention on the rising cost of living.

"In April this year, the Consumer Price Index (CPI) saw a 1.8 per cent rise after GST compared to 0.8 per cent the previous month. However, this rate is still under control and not all items in the basket of goods have shown a drastic increase," he said.

In another reply to Datuk Mohd Zaim Abu Hasan (BN-Parit), Najib said Malaysia was considered a na­tion with manageable and moderate debts totalling RM596.8bil or 51 per cent of the Gross Domestic Product (GDP).

Almost all - 97 per cent or RM579.2bil - he said, was domestic debt while the rest, RM17.6bil, was foreign debt.

"The debts are mostly Govern­ment bonds issued domestically, 72.4 per cent of which are held by major institutions while 27.6 per cent are held by foreign investors," he said.

The Government, said Najib, was committed to ensure the debt level did not go above 55 per cent of the GDP.

He also told Datuk Wan Mohd Khair-Il Anuat Wan Ahmad (BN-Kuala Kangsar) that Bank Negara had placed 171 companies under its watch list for involvement in get-rich-quick schemes since 2000 and uploaded this onto its website.

"Between 2000 and last year, 66 companies and individuals were investigated for offences related to illegal deposit taking," he said.

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