Increase productivity and use its gains to substitute revenue from depleting oil reserve instead of the implementing the Goods and Services Tax (GST), reiterated DAP parliamentarian Tony Pua today.

Prime Minister Najib Abdul Razak said that the country's income and growth hinged on oil revenues, and this source would slowly disappear as its resources are finite, when making his case for GST.

The premier, however, assured that basic goods and essentials would be exempted from GST so as not to burden the lower and middle income groups.

dap graftbuster pc 230409 tony pua "It's utter nonsense," said Pua. " If you implement tax across the board, be three, four or even eight percent, it will be a burden to these two groups, especially when the economy is not at its best."

The Petaling Jaya Utara MP said that GST is a regressive tax. "The poor will always suffer more. There may be exemptions on certain essentials, I don't know, maybe basic goods such as sugar.

"The prime minister said aid will be given to the poorest to compensate for what they have to pay for basic essential goods. Eighty-five percent of working Malaysians do not pay tax.

"Can they exempt anywhere near the 85 percent? They can't. At most they can exempt five percent, so the balance of the 80 percent that don't pay tax will suffer as a result," said Pua.

Pua suggested that the government instead increase the basic income of people, and then convert the income tax system to GST.

They can't keep going back to the people

On the matter of plugging revenue gaps as a result of the over-reliance on petroleum, Pua said: "It's ridiculous. Every time they run out of money they go back to the people and ask for more money.

"The way to do it is to increase productivity of people and invest wisely on income from petroleum and gas. Once our income level increases, our productivity increases, our tax revenues will also increase.

"Singapore has lower income tax rates than Malaysia and the tax revenue is higher, although the country does not have a petroleum sector to rely on," said Pua.

"(This is) because they have managed to raise the productivity level of the people. So the approach to solve our revenue problem is not by taxing the people more.

"It is by raising the productivity that they can earn more, and naturally as you earn more, the more tax you pay to the government," he added.

He cautioned that "short term measures", in obvious reference to the GST, could only bring more harm if its objective is to bring in higher revenues.

"If they can say now that the revenue from oil and gas is being depleted, what they will do is (in future), raise it from four percent to even seven percent," said Pua, who urged the government to not burden the people.