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Income from M’sia GST ‘will benefit people, not settle govt debts’

KUALA LUMPUR — All revenue from the coming Goods and Services Tax (GST) will be used for the benefit of the people and not to pay off government debts, Malaysian Deputy Finance Minister Ahmad Maslan said yesterday in a strong rebuttal to claims by a senior member of his party that Putrajaya had not been forthcoming on the real reason for implementing the tax regime.

Income from M’sia GST ‘will benefit people, not settle govt debts’

A currency trader holds up Malaysian ringgit notes at a currency exchange store in Kuala Lumpur, Malaysia on Tuesday, March 17, 2015. Photo: AP

KUALA LUMPUR — All revenue from the coming Goods and Services Tax (GST) will be used for the benefit of the people and not to pay off government debts, Malaysian Deputy Finance Minister Ahmad Maslan said yesterday in a strong rebuttal to claims by a senior member of his party that Putrajaya had not been forthcoming on the real reason for implementing the tax regime.

In an unprecedented speech in Parliament yesterday, former Finance Minister Razaleigh Hamzah had questioned where the government income from the GST would go. “The people have the right to know whether the GST that will be implemented this coming April will benefit the country or is merely to pay interest to lenders and bondholders,” said Mr Razaleigh, Malaysia’s longest-serving lawmaker.

“The purpose of GST implementation should not be made a secret. If this additional burden is placed on the people without due reason, we are being unfair,” he added.

Mr Razaleigh also reiterated an earlier call to postpone the broad-based consumption tax, which goes into force on April 1, arguing that it would be an additional burden to the people at a time when the country was facing high household, corporate and government debts.

Speaking to the media outside Parliament later, Mr Maslan said income from the GST would be placed in a Consolidated Fund and utilised for the benefit of the people. “GST from the people will be returned to the people for their good,” he said. “Accusations about the money going to paying creditors are untrue.”

In his hard-hitting parliamentary speech, Mr Razaleigh criticised the “critical state” of the nation’s financial situation and called on Putrajaya to be transparent about the extent of the nation’s debt.

He said this would, in turn, enable Members of Parliament (MP) to fulfil their responsibility of making sure that the country’s income is used for the interests of the people, instead of only servicing interest on loans and bonds issued.

“As members of the Dewan Rakyat (Parliament), we are also responsible for making sure all guarantees, financial instruments and letters of comfort that burden the people with debt are tabled in this hallowed House.

“This will enable us to evaluate with full responsibility whether or not it is fair to continue to burden the people,” he said.

Last October, Mr Razaleigh proposed in an open letter given to all MPs that GST be deferred in view of what he described as the critical state of the economy and household debt.

Yesterday, the lawmaker said Malaysia’s financial health had not improved, expressing his worries over the household debt, pegged at 87.4 per cent and ranked as one of the highest in Asia, and urged Parliament to consider carefully its plan to go ahead with the consumption tax.

“We are also burdened with high corporate debt, which we should be concerned about. Unfortunately, we do not have a real understanding of this problem, because of a lack of transparency.”

Mr Razaleigh won the Gua Musang parliamentary seat, then known as Ulu Kelantan, in 1974. He served as Finance Minister and International Trade and Industry Minister under former Prime Minister Mahathir Mohamad, and has often been touted as a compromise candidate for the position of Prime Minister if the opposition Pakatan Rakyat pact captured Putrajaya.

The 77-year-old veteran MP was also founding chairman and chief executive of Malaysian national oil company Petronas. AGENCIES

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