If Najib means income tax, then we are indeed facing a big problem. Malaysia's population is 30 Million, or thereabouts. Assuming 50% are working age, it works out to only 1.5 million taxpayers out of 15 Million working age adults. Which also means the 90% or 13.5 Million workers are earning below taxable income.
This tells us that:
1. Malaysians' are either working at low paying jobs, or they are underpaid.
2. Inflation will greatly impact the disposable income after tax.
3. Government's solution to increase revenue through taxing the working class.
4. No mention of government cutting their spending but instead increases it with salary increments & bonuses to civil servants.
5. If the economy is growing, why isn't the government collecting more from corporate, personal & other taxes?
6. Either the government is spending more than it's income, or businesses are evading taxes, or economic growth did not translate to increased revenue.
Their solution is to take the easy way out, which is to tax everyone with GST. Raising income taxes would be pointless because the pool is small.
But there's one thing no one thought of asking, "After the removal of subsidies & introducing GST, does it mean that the government will not have to borrow anymore? How long will it take to reduce the debt to manageable levels?".
However, I observed that many of those countries who have similar taxes like GST or VAT, with the exception of a few, still have huge debts on top of high income tax. The only difference is their wages and standard of living are much higher.
Finally, I would like to state that subsidies are not wrong. It is perfectly within the people's right to enjoy subsidies if they need it, and it is the responsibility of the government to provide it.
On the other hand, signing lopsided agreements and contracts with highway operators, power producers, water concessionaires, vendors and service providers are morally & ethically wrong.
Najib: Only one out of every 10 Malaysians pays tax
PEKAN: The current mix of low taxpayer base, increasing public spending, and resistance towards subsidy rationalisation is a recipe for trouble, said Prime Minister Datuk Seri Najib Tun Razak.
Revealing that only one out of every 10 Malaysians pays tax, Najib said there is an urgent need to raise government revenue, while at the same time reining in increasing amounts spent on broad-based subsidies such as on fuel.
According to Najib, who is also the Finance Minister, the number of civil servants would increase each year, but when revenue did not rise in tandem, the country would have to resort to borrowing. In the same vein, the proposed goods and services tax (GST) was one such measure that could lead to more revenue for the government, but has been opposed by some.
“When I do not announce any bonus during the tabling of the Budget, then it is not considered a good budget. But each time bonus is dispensed, it is RM5.6bil in spending a month,” Najib said at a 1Malaysia People’s Aid (BR1M) presentation ceremony at his constituency here yesterday.
He added that subsidies had to be carefully targeted to strengthen the country’s finances.
“We say our country’s economy is mid-high income and a lot better than other countries. But the question that is on our minds is why are petrol subsidies reduced and the sugar subsidy removed when our economy is already good?
“We have to explain that the rationalisation is to avoid a situation where we have to borrow money,” said Najib, who pointed out that money saved from cutting subsidies was then channelled to more equitable ways of helping people, such as BR1M.
“A person who drives a Kancil only enjoys RM900 in subsidy a year while those with a big car can stand to benefit up to RM2,400 if they drive 50km a day. This is not fair.
“Also, why should foreigners enjoy our subsidies too? That is why we want to refine the system to become targeted, fair, transparent and efficient,” he said.
Najib added that BR1M could also help the people settle debts, and, in principle, this was also helping those in need.
“It is meritorious in Islam to help others. It is okay if the Opposition wants to denounce our efforts, as long as we hold on to the principle of helping others,” he said. - SOURCE
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