Workers will spend average RM558 a year on GST

GEORGE TOWN (Feb 25, 2010): The Federal Government has been cautioned that its decision to introduce the Goods and Services Tax (GST) next year will increase the financial burden on Malaysian workers, with each individual needing to fork out an average of RM558 a year for the tax.

In saying this, Chief Minister Lim Guan Eng urged the Federal Government not to impose the GST, which is expected to be enforced at the rate of 4%, to prevent the country’s 12 million-odd workers from being further stressed amid an impending inflation scenario.

Noting that the GST would cause new taxes totalling about RM6.7 billion from consumers, he calculated that each worker on the average would be required to part with RM558 every year due to the GST.

In particular, 85% of the Malaysian workforce, who currently earn less than RM3,000 a month and therefore do not have income tax payments, would be required to make new tax payments with the GST.

“Due to exemptions and rebates, those having monthly salaries below RM3,000 effectively do not have to pay anything for their income tax,” he said.

“But with the GST, these people who did not have to pay tax before, will have to do so. That is why we hope the GST will not be imposed,” said Lim.

Lim, who is also the Penang Development Corporation (PDC) chairman, said this while officiating at a Chinese New Year gathering for staff at PDC here today.