GST introduced to curb illegal outflow of money, says Najib
Published on: Tuesday, September 18, 2018
Kuala Lumpur: Former Prime Minister Datuk Seri Najib Razak said the Goods and Services Tax (GST) was one of the measures that was put in place to curb the illegal outflow of money from the country.In a Facebook post, Najib said under GST, the total cost of the entire network of suppliers was monitored, allowing the government to detect companies that set unusually high or low prices for goods that were imported or exported."GST restricts companies from carrying out dishonest trading as they are monitored by the government. I have repeatedly stated that a large share of GST collections, compared to the Sales and Services Tax (SST), was from those who avoided taxes and from illegal economy, and not from the ordinary people," he said.
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"The implementation of GST has also enabled us to have a broader tax base of income, which subsequently allows us not to rely heavily on corporate tax."Should our tax rates were reduced to the rates imposed by low-tax countries, dishonest trading will not take place."Najib was commenting on a report that RM1.8 trillion was taken out of the country illegally between 2004 and 2014.He said, during his tenure, the Barisan Nasional government had also lowered the corporate tax to 24 per cent, while the tax rate for small and medium enterprises was also less than 24 per cent.
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Najib said he had planned to continue reducing the corporate tax, but country's oil revenue outlook was bleak in 2015 (the year when GST was introduced)."This has restrained us from implementing another reduction in corporate tax rate."
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Najib said the lowering of the corporate tax rate and the implementation of GST had made the country more competitive."Few years back, Thailand had reduced its corporate tax from 30 per cent to 20 per cent, Singapore at 17 per cent, while Indonesia is planning to reduce it to 17 per cent."Earlier this year, the United States had reduced its tax to 21 per cent from 35 per cent."He added that many countries had replaced their SST with GST."No other country than Malaysia abolished GST after its implementation and went back to SST."Najib said all the measures had been put in place under the National Transformation Plan to boost the country's economic and fiscal health, and its competitiveness."But, the people were not aware of it, or were easily instigated by Pakatan Harapan propaganda."Stay up-to-date by following Daily Express’s Telegram channel.
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