GEORGE TOWN – The Penang Malaysian Trades Union Congress (MTUC) has urged the Finance Ministry to defer plans to re-impose the Goods Services Tax (GST) in the Budget.
GST is only practical to sustain economic growth when the workforce is shielded from rising living costs through progressive salaries, said the union’s veteran secretary K. Veeriah.
Now is not the time for a comprehensive taxation system, which GST apparently entails despite recommendations for it by some economists, he said.
If there is a prevailing pressure to fill the government's coffers for development projects, Veeriah instead sought a more detailed effort to tax the T20 group, who are the rich.
He said the M40 (middle-class), B40 (lower middle class) and L20 (poor), are not in any position to aid the government through taxation or even a rate hike in public services from assessments or utility charges.
“The middle class is struggling big time. They are not entitled to any help from the government, which is only focused on the B40. They are sandwiched.”
He was referring to suggestions from some economists for the unity government to reimpose the GST to address the depleting coffers in view of the rising need to spur development projects, particularly in the rural heartland.
Overall, the total debt in the country is now over RM1 trillion.
Speaking to The Vibes, Veeriah said that more efforts need to be put in place to secure the funding from the rich in the country.
“We cannot allow the rich from corporate entities to those involved in illicit activities to escape the glare of the taxman. Tax those who can afford it. But to use a broad base system like GST is not a necessary evil.
“We need to safeguard the plight of the working class.”
It includes increasing Bank Negara's surveillance on the digital trail of suspicious underground economic activities from money laundering, fraudulent schemes and scams.
He suggested that the finance authorities focus on better monitoring of funds exiting the country from the personal accounts of the rich.
This is so as to avoid a repeat of the 1MDB global financial scandal, where at least two generations may have to help pay for the debt incurred.
Despite signs of economic recovery, Veeriah said that the consequences of Covid-19 lockdowns continue to eat into the wallets of the working class.
Veeriah said that the progressive salary structure needs to be invoked soon. He added that the labour authorities also need to either remove or revise the minimum wage ceiling of RM1,500, as most workers cannot survive on such sums now.
He said that the wages need to be market driven and employers need to find means to increase salaries, as there is no point in showcasing profits when workers are struggling.
Foreign workers may accept such wages, but in reality, they need another job to make ends meet, said Veeriah.
Meanwhile, Penang Consumer Protection Association president Datuk K. Koris Atan has called on the Human Resources Ministry to partner with consumer activists to generate educational campaigns on how to become smart consumers.
“We need to ensure our consumers only purchase items from ethical traders and restaurateurs. If there is profiteering, we need to boycott such businesses.”
Koris said that better-informed consumers can help check the rise of inflation by only sticking to traders who possess ethics and have a long-term outlook on their businesses.
He also wants more efforts placed on improving the domestic supply chain of essential items from rice to sugar and flour, while clamping down hard on hoarding.
Koris also said that a deterrent tax can be imposed on sugar consumption since diabetes is on the rise in the country, while tax should be increased on tobacco, too.
It is time for consumers to be wise instead of being dependent on those who exploit the supply and demand factors to drive profits, he said. – The Vibes, September 7, 2023
