MalaysianDigest (12/5/2014): Putrajaya is struggling to convince Malaysians on the Goods and Services Tax (GST) because it is approaching the issue as a branding exercise, former minister Tan Sri Rafidah Aziz said.
Rather than painstakingly explaining the controversial consumption tax still misunderstood by most in the country, Rafidah said the government was opting to commission costly billboards as though it were attempting to cultivate a brand.
“I see one in my area here that says GST is not charged for education. What for? That billboard is a few hundred thousand dollars,” the former minister of international trade and industry told the Sunday Star in an interview published today.
The former Wanita Umno chief also criticised the manner in which the mechanics of the consumption tax is being explained, complaining that even she found the information overwhelming and difficult to comprehend.
She added that the complexity of the information also lent itself to manipulation by critics, further hampering the understanding of the GST.
Rafidah pointed out that during her time at the head of the Umno wing, its members had been at the forefront of disseminating information on policies directly to the constituents.
“I don’t know who we are delegating to do the explanation. It’s very human to be wary of something you don’t understand,” she added.
The former minister then recounted the inflation spike experienced by Malaysia during the 70s and noted that information had then been managed to allay public fears.
Rafidah said that despite the “havoc” of double-digit spikes in inflation, the government was able to explain the predicament to the public and provide suggestions on how to manage the issue.
“For the GST, it’s not like something we cannot handle … Unless we explain it properly in a way that people understand, it’s going to be debated forever,” she added.
Merdeka Center released a survey last week showing that 62 per cent of Malaysians polled last month were against the implementation of the GST.
The independent pollster also noted that comprehension of the GST was still low, with 53 per cent of respondents admitting that they did not understand how the consumption tax would work.
The GST is a consumption tax, meaning all Malaysians will be taxed according to their level of spending, regardless of income. This differs from income tax that is only applicable after a certain earning level is exceeded.
Malaysia’s proposed GST rate of 6 per cent is the lowest in the region, as most countries implement a 10 per cent value added tax (VAT).
The tax was first announced during Budget 2005 and was originally scheduled to be implemented in 2007 before it was deferred due to fierce public opposition.
It was finally announced in Budget 2014 last year, a few months after the May 5 general election, and will be enforced starting April 1 next year.
Resistance culminated recently in a May Day rally by over 15,000 people to protest its introduction, which also saw signs of discontent over Putrajaya’s prosecution of opposition leader Datuk Seri Anwar Ibrahim and handling of missing flight MH370.