Either GST, or M’sia faces bankruptcy: Najib
Malaysia has a stark choice of either increasing government revenue via the goods and services tax (GST) or burdening the country by borrowing more money.
Prime Minister Najib Tun Razak said the implementation of GST was necessary as the country risked becoming bankrupt like Greece if it resorted to borrowing.
“We have to find additional sources of income and that’s why we have to implement the GST,” he said at a seminar on Strengthening the National Economy.
He said rating agency Moody’s Investors Service changed their outlook on Malaysia from neutral to positive just weeks after the GST was announced.
“This is because they know Malaysia was taking fiscal consolidation steps which are unpopular but necessary for the good of the country,” he said.
Najib lashed out at the opposition for their mixed comments about whether they supported the GST and for clouding the issue with unfair arguments, including the high electricity bill of his official residence,
He pointed out Seri Perdana (official residence of the prime minister) belonged to the people of Malaysia and he was occupying it temporarily just like his two predecessors.
“It has a function room. If a head of state comes, are we expected to dine in the dark?
“If the Chinese premier comes, should we use candlelight and say this is more romantic?” he quipped.
Najib said out of an entire workforce of 14 million, only 1.34 million paid income tax.
“That is just 10 per cent who pay, and there are others who should pay but don’t,” he said.
He pointed out the definition of patriotism is fulfilling one’s responsibility to the country and this included paying taxes.
He added that the public’s expectations on the government was always increasing, and more revenue is needed to meet these demands.
He said Malaysians cannot always depend on revenue from petroleum which will eventually run out.
Najib said the public’s fear that the GST would cause staggering price increases was unfounded.
He said 160 other countries have implemented the GST and from their experience there is only a slight increase in prices in the year of implementation.
“It is unlikely all these countries made a mistake by implementing the GST,” he said.