Malaysian Finance Minister denies PKR’s GST claims

KUALA LUMPUR — A war of words broke out yesterday between Malaysia’s Second Finance Minister Johari Abdul Ghani and an opposition lawmaker after the latter claimed that Parliament had approved an expansion list of 60 food items to come under a consumption tax, only to do a U-turn by cancelling it.

“Rafizi is wrong. None of the 60 food items was tabled in Parliament. In fact, it was never approved by the Cabinet,” said Mr Johari, in reference to opposition Parti Keadilan Rakyat (PKR) lawmaker Rafizi Ramli’s claims.

“Even the Customs director-general wasn’t aware of the gazette being uploaded on the Customs website,” Mr Johari told Malay Mail Online in a WhatsApp text message.

Mr Rafizi had on Tuesday furnished parliamentary records showing that the proposal to impose Goods and Services Tax (GST) on 60 additional food items (ranging from avocados to swordfish) was mooted by Prime Minister Najib Razak (who is also the Finance Minister) at the last parliamentary session, held between March and April.

Mr Johari said yesterday that Mr Rafizi’s claims were baseless. However, he will not be taking any legal action against the opposition politician as it would not be “worth it”.

Earlier, the Malaysian media reported that more that 60 food items would be subjected to the 6 per cent GST from July 1, after the order was gazetted on June 6. The announcement resulted in a backlash from the opposition and the public.

In an abrupt U-turn following the outcry, Customs Department director-general Subromaniam Tholasy issued a statement on Monday saying that the department had annulled the decision after consulting the Finance Ministry.

Mr Johari implied on Monday that the Customs Department had jumped the gun — saying the proposed imposition of the GST was made at the department level, without being referred to the ministry to be finalised.

He also said any imposition of the GST on new items must be approved by the Cabinet.

Malaysia first imposed a GST of 6 per cent in April 2015, despite the idea of a new tax being unpopular. Consumers have felt the pinch, especially with a weakening ringgit, and opposition parties have held anti-GST rallies.

The government collected RM38.5 billion (S$12.5 billion) in GST last year and expects to collect RM40 billion this year. Mr Najib has characterised the GST as a “saviour” of the Malaysian economy, helping to make up for lower revenue from cheaper crude oil exports. AGENCIES