COMMENT | Anwar doesn't understand GST, or his hands are tied

COMMENT | When Prime Minister Anwar Ibrahim said the goods and services tax or GST would be introduced only if the minimum income rises to between RM3,000 and RM4,000 per month, he demonstrated a dismal lack of understanding or his hands were tied.

Like value-added taxes everywhere, it’s a system designed to tax consumption, reduce tax evasion through proper record-keeping, and widen the tax net to bring a greater number of people in.

The poor are less affected because they consume less. In Malaysia, they are even more so because of numerous exemptions given to essential goods and services.

This together with a reluctance to cut blanket subsidies in favour of targeted ones, foreshadows grim times for Malaysia’s future economic health, with a twin pincer of revenue shortfalls and too much expenses. If that is not sorted out, it spells disaster.

While Anwar said he understood the importance of GST, he also implied that its implementation would be...