GST vital to high-income nation goal’

Protesters march to Independence Square during a demonstration against Goods and Services Tax (GST) in Kuala Lumpur May 1, 2014.

The implementation of the Goods and Services Tax (GST) will help prevent the country from falling into the middle-income nation trap and enable it to strive towards becoming a high-income nation, said Prime Minister Datuk Seri Najib Razak.

The government, he said, needed a more efficient tax system to improve its revenue collection and ensure the country's economic resilience to take a leap from an emerging economy to an advanced economy nation.

He said only one out of 10 working Malaysians were paying personal income tax and the GST would give the government a broader and more efficient tax system to improve its revenue stream.

"By earning higher revenue, the government can continue with its transformation programme to stimulate the economy and improve our competitiveness in attracting investors so that we can create more job opportunities.

"We cannot simply apply for loans from foreign lending institutions as this will compromise the level of confidence in our economy.

"Sometimes, we need to wait several years to reap the fruits from the seeds that we plant today. But if we do not plant the seeds, we will never reap the benefits," Najib said in his speech during the national-level Civil Servants' Workers Day celebration in Dewan Wawasan, Jitra here.

Present were Menteri Besar Datuk Seri Mukhriz Mahathir; the Congress of Unions of Employees in the Public and Civil Service (Cuepacs) president Azih Muda, Chief Secretary to the Government Tan Sri Dr Ali Hamsa and Inspector-General of Police Tan Sri Khalid Abu Bakar.

He said the government had significantly reduced the country's poverty rate from 60 per cent in the post-Independence era to below 1.7 per cent in 2012 and could not risk endangering the ongoing economic transformation programme.

Najib said despite global uncertainties, Malaysia still managed to record a Gross Domestic Product growth of 4.7 per cent last year and was expected to perform even better this year.

"We are on the brink of transformation to become an advanced economy from an emerging economy. If we stop this transformation now, we will expose the country and the people to grave risk."

Najib assured civil servants that the government had taken the livelihood of the people into consideration before proceeding with the transformation programme.

He urged the people to see things from a wider perspective, although at a glance, the transformation programme, such as the GST implementation, was viewed as unnecessary and uncalled for.

"The government has strong reasons to proceed with the transformation. We hope the people will react to this in a rational manner."

Najib, who is also Barisan Nasional (BN) chairman, told the 5,000 crowd that the BN government had no plans to reduce the 1.5 million civil servants employed nationwide, while reassuring them that in fact, it was planning to do more to improve their well - being.

"Some leaders from the opposition said they would reduce the number of our civil servants by up to half if they come into power. They said the 1.5 million figure is too large for our 29 million population."