LUMUT: Prime Minister Datuk Seri Anwar Ibrahim reiterated the government’s stance against reintroducing the goods and services tax (GST) as it would unfairly burden lower-income earners.
Anwar said on the surface, GST looks like a good system as it is simple, easier to manage with just a flat 6%, and everyone pays, including the poor and the unemployed.
He said the implementation of GST would mean the poor, including fishermen, smallholders, low-wage earners and street vendors, would be taxed on everyday essentials.
“GST is a broad-based tax. Everyone pays, even for sugar, flour and basic food items.
“Yes, it is systematic and easy to implement, but is it fair, as the poor or the unemployed will need to pay taxes just to eat?” he said in his speech at the closing of the Madani Rakyat programme at the Lumut Waterfront here on Sunday (June 15).
He was responding to repeated claims by Opposition MPs that GST would be a better system compared to the existing sales and service tax (SST).
Anwar said it would be all right to implement GST should the country's economy grow stronger and if the minimum wage is above RM4,000.
He also defended the government’s continued reliance on SST, noting that it targets imported and luxury goods rather than daily necessities.
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“When imported bananas were taxed, people made noise, but these are not the local bananas like pisang mas or rastali – those are not taxed.
“It is the imported bananas, avocados and codfish, for example, that are taxed, because these are mostly consumed by the wealthy,” he said.
He added that taxes collected under SST help fund critical public services and national defence.
“If we do not collect taxes, how do we repair hospitals, fix roads, build schools, or buy new aircraft for our Armed Forces?
“These are not luxuries, but necessities funded by national revenue, including taxes,” he said.
Anwar also dismissed claims that the government was burdening the people with electricity tariff hikes, pointing out that 85% of consumers did not experience any increase.
“So those shouting about defending the Malays and Islam, who are you really defending? The rich? Because the village people did not see their bills go up. The rich did,” he added.
He admitted that no taxation system is perfect, but welcomed feedback and promised adjustments where needed.
“I am not saying SST is flawless. If there are hiccups affecting businesses, we can sit down, discuss, and improve.
"But people must understand why taxes are needed," he said.
