Government not decided on GST date yet

Second finance minister Datuk Seri Ahmad Husni Hanadzlah said this was becuase in-depth studies are still being done.

He said that a 2009 study done is no longer relevant due to the changing prices and the economic situations, and therefore a re-study is needed.

The government expects an additional revenue of RM6 billion if GST is implemented at a rate of 5 per cent -- this would boost its revenue to RM26 billion. Without GST, the revenue is expected to be at the RM20 billion level.

The following year, the revenue would increase to RM27 billion if GST continues to be implemented, he added.

Husni was replying to a question by Setiawangsa MP Datuk Ahmad Fauzi Zahari, who asked to what extent the government had clarified to the people whether it intended to impose the GST at a 7 per cent rate.

On a question on why the bill was withdrawn in 2009, Husni said that the government wanted to hold more discussion and consultation with groups.

Meanwhile, Kluang MP Liew Chin Tong said that the implementation of the GST will lead to the collapse of Umno.

Liew said Umno was also facing the problem of internal strife and if the prices of palm oil goes down drastically, the support base of the Malay-based party will be gone.

He said that the problems with the GST was that there was little trust from the public over how the government spends their taxes, the issue of corruption and whether the additional revenue will lead to genuine growth.

"We need a solution on people's over dependence on petrol subsidy but GST is not the answer," said Liew.

He said that several countries have already begun to re-consider the GST model as it would only increase the income divide between the rich and poor.

"Basically the GST will affect people who never paid taxes, on the whole, prices for everything will increase.