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Tuesday, March 2, 2010

I pay, you pay, let us all pay together!

Selena Tay

With the implementation of the GST in mid-June 2011, everyone will be paying taxes. The tagline of Lembaga Hasil Dalam Negeri (LHDN) should be ‘Now Everyone Can Pay’ and an advertisement should be put forth showing a Malay, Chinese and Indian with smiling faces to promote a tax-paying 1Malaysia.  

No one can escape. Even poor folks, senior citizens, the physically disabled, ill and bedridden folks and low-income earners will have to pay GST. No one will be exempted because everyone will be caught in the net. 

Previously 'small-fry' folk such as those mentioned above would be exempted from paying taxes as the tax dragnet would only catch the big fish. However, now the BN government has a much bigger and wider net that will allow them to catch all the 'ikan bilis' as well.  A truly efficient tax-collection system where no one is exempted!

The BN Government must make an effort to plug the leakages and stop unnecessary white elephant projects. Money saved from these alone would be significant and could replenish the country’s coffers rather initiate new means of collecting more money from the rakyat, especially from those who can ill-afford it. 

One prime example of how the rakyat’s money has been wasted is none other than the Port Klang Free Zone fiasco.  And what about the various economic corridors here and there?  Has anything come out of it?

Everyone is a consumer. With the imposition of the GST, even the poor who buy necessities such as clothes, shoes, soap and toothpaste will have to pay tax. This will only force them to buy the cheapest products in the market. Comparing dollar for dollar we get less out of 1,000 units of our currency compared to those in UK.  This is because the power of our ringgit is weak, forcing us to spend more for our purchases.  The example below illustrates the point clearly.

Worker in Malaysia      Worker in Britain

RM                              ₤

Salary                                                  1,000-00                      1,000-00                    

Minus purchase of shampoo                    13-00                           5-00                    
Balance                                               987-00                         995-00
=======                   =======

A Malaysian worker with a salary of 1,000-00 after purchasing shampoo will have less money left compared to a British worker.  This is micro-economics.

Another good example is the full English breakfast that costs ₤3, sometimes ₤2.75.  You will be asked to choose 8 types of food out of the many varieties available and my choice is usually:-

1) fried mushrooms (this is delicious, you have got to try it when you are in UK);

2) tomatoes;

3) 2 slices of toast bread (triangle-shaped) and a small cube of butter;

4) beans;

5) scrambled eggs;

6) sausages;

7) bacon; and   

8) ham

Now you tell me in Malaysia, where can you get this type of breakfast for RM3-00?  The same type of breakfast like the one shown above will simply cost you more than RM10-00. Look at the table below.
Worker in Malaysia     Worker in Britain

RM                              ₤                    

Salary                                                  1,000-00                      1,000-00                    

Minus English breakfast                           10-00                          3-00                    
Balance                                                990-00                         997-00
=======                   =======

Again the Malaysian worker ends up with less money unless of course he eats 'roti canai' and drinks 'air sirap' (which will cost less than RM3-00).  This obviously shows that as the cost of living goes up, the standard of living goes down with poor Malaysians unable to afford or to enjoy small luxuries. Instead, they have to eat poorly in order to save a bit of money. 

When the power of a currency is weak, we need to use a greater quantity of that currency. In UK, I have purchased newspaper for 35 pence.  Here, I can’t buy anything for 35 sen except sweets. Of course, I can still get The Sun (pardon the pun) for free from 7-Eleven outlets. Thank God for small mercies.

What I am trying to say is that we are not ready for GST yet unless the power of our currency becomes stronger.  Even toothpaste these daysis quite costly.  The large tube usually costs at least RM6-00 per tube.  Some cost about RM7-00 or RM8-00.

The rich will not feel the increasing cost of living but the poor will certainly feel the pinch. The BN Government claims to be a caring government.  But I guess that is all empty talk. 

What the BN Government is trying to do is as plain as robbing the poor to help the rich, the very antithesis of legendary British hero Robin Hood, who robbed the rich to help the poor.


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