Last updated Friday, September 30, 2016 11:26 am GMT+8

Friday September 23, 2016
01:45 PM GMT+8

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The Penang lawmaker highlighted that the GST charge on state and local government agencies does not take into consideration the spending on public works projects. — Picture by KE OoiThe Penang lawmaker highlighted that the GST charge on state and local government agencies does not take into consideration the spending on public works projects. — Picture by KE OoiKUALA LUMPUR, Sept 23 — Lim Guan Eng urged the federal government today to emulate developed nations like Australia and return some of the consumer tax collected to the state governments to be used for public projects.

The Penang chief minister said his state administration and local government agencies have not been spared the 6 per cent Goods and Services Tax (GST) charge since its introduction in April last year, and have paid RM48 million a year since.

“This unnecessary cost has only imposed a greater burden on the state and local governments,” he said in a statement.

The Penang lawmaker highlighted that the GST charge on state and local government agencies does not take into consideration the spending on public works projects such as roads, drains and community halls, which he said is not for profit but for public benefit.

“Since the BN Federal government likes to sing the praises of GST because it is implemented by many developed countries, then the BN Federal government should emulate their example of distributing the GST collected back to the states.

“For example, in Australia, any GST collected in a state is fully returned to the state. Here, in Malaysia, state governments not only do not get a single cent of GST collected but have to pay GST,” said Lim who is both Air Putih assemblyman and Bagan MP.

The federal Opposition lawmaker said that though the Customs Department is confident it can collect RM39 billion in GST this year, data shows a 30 per cent drop in the collection for the second quarter of 2016 compared to the first three months, putting the total as at end of June at only RM17.2 billion.

He claimed the decline showed the GST has left businesses and Malaysians poorer, adding that the government will face a shortfall in their collection in the second half of the year as national oil firm Petronas’ contribution to federal coffers will be halved to RM16 billion due to the fall in global crude oil prices.

Lim who is also DAP secretary-general claimed businessmen have complained of unreasonable demands and double standards by the Internal Revenue Service and hoped there will be no cover-up in future collection of GST to make up for the shortfall.

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