The ruling BN government has made the rakyat a scapegoat by using the Goods & Services Tax (GST) to overcome corruption and wealth inequality, which the government has failed to handle, claims Pahang PKR.

"While he unabashedly said that GST saved the country, International Trade and Industries Minister (MITI) Mustapa Mohamed hid the real situation about the government failing to handle two big issues that had caused the country's fiscal problems.

"First is the fraud and corruption that ultimately increased the country's spending without benefitting the rakyat.

"Second is the failure of tax policies that can overcome wealth inequality in our country," Pahang PKR deputy chairperson Ahmad Nizam said in a statement today.

Previously, Mustapa had said the country would have been in serious trouble without the GST, citing decreasing global oil prices.

He also said that the GST has taught entrepreneurs to be more disciplined about maintaining proper accounts.

Ahmad on the other hand said it is actually the failure of the Umno-BN government in enforcing the law that has enabled traders to avoid paying taxes.

"If this is the reason GST was implemented, then it is clear the government is making scapegoats out of the rakyat because of their failure to enforce laws related to the Sales and Services Tax (SST) previously," he said.

‘Prices still rising’

Ahmad Nizam also refuted Mustapa's remark that the GST only caused a "one-off", temporary inflation.

Ahmad cited a Bank Negara report that shows the country's inflation rate rose above the average monthly inflation rate, that is two to three percent, at the beginning of GST's implementation.

The inflation rate continues to be higher than the average monthly inflation rate 22 months later in February 2017.

"Actually, if you ask the public, they still feel the prices of goods continue to increase from time to time," he said.

Putrajaya, he said, should be examining progressive taxes with the potential to be increased or established, such as the capital gains tax or the windfall tax.

These progressive taxes could be an alternative to the GST in additional revenue for the federal government, he said.

"Unfortunately, for the sake of preserving the interest of the wealthy including the kleptocrats, the government has imposed GST, which has increased the cost of living for the poor," he said.