Lesson from the GST hike that didn't happen


Hafidz Baharom

BY now, many are in the mood for Eid Mubarak or Hari Raya Aidilfitri, perhaps even to the point where we have not been paying close enough attention to the fact that the government was possibly trying to do behind our backs with regards to the GST.

And quite honestly, the media failed in this one as well.

On June 1, the government issued a circular listing yet another 60 items to be removed from the list of zero-rated items from the Goods and Services Tax (GST) come July 1, 2017. The one-month notice went unregarded by the media until it blew up in The Star on Monday, June 19.

The government did an about-turn and announced that the imposition order will be cancelled, but it took 18 days for anyone in the media to notice. It wasn’t even noticed by the lawmakers, tax advisors, or even the many, many armchair critics on social media.

In other words, it was a total national oversight moment probably caused by the lull in politics and the many, many iftar events that tired and filled us up.

Anyhow, the list of 60 food items gazetted to be charged GST has since been listed on the government archives – in  the e-Federal Gazette and even from the Customs Department’s GST site.

Now, on the surface of it, the applied GST would have seemed fair due to the fact that it applied to frozen and preserved goods, as well as many things not bought by your average Ahmad, Muthu or Lim. 

After all, you don’t find the poor buying frozen spinach imported from New Zealand, or even frozen potatoes which I am guessing are the seasoned wedges and shoestring fries you find in our supermarkets.

But at the same time, there are a number of things that irk me about applying GST to these goods, and these need answers. 

Seeing as how these goods are imported, wouldn’t applying a GST be doubling the tax on these items?

And while we rarely eat fresh dates, figs and avocados, how did grapes somehow make that very same list?

Similarly, what does the government have against preserved mushrooms? Is there now an anti-Hobbit lobby in Putrajaya, winding its way into Customs?

And why on God’s green earth is Customs only applying the GST on packaged green tea? Why does this not apply to Earl Grey, Assam, Darjeeling or whatever else type of tea available on the shelves?

What Datuk Subromaniam Tholasy of the Customs Department says is true – not a lot of Malaysians dine on swordfish, eels and octopus. And not a lot of Malaysians buy frozen vegetables, pickled olives, gherkins and sweet corn. Nor do they go all out to eat fresh figs, avocados, dates, grapes, apricots, cherries, peaches, plums and sloes.

Plus, we don’t usually go out and buy saffron unless it’s for a special occasion or if we’re learning how to make a paella.

But this is besides the point. While those goods are imported, they are fresh goods. Thus why is a GST applied? What is the justification of applying a GST to these items when there are no services or downstream processing on the goods?

Isn’t this doubling the revenue collected by Customs, seeing as how these are mostly imported goods? And is this the long-term strategy of Customs, to apply a GST on all imported goods in the future?

If this is so, the narrative for the GST has changed somewhat, hasn’t it? What this order was supposed to do was make the GST a consumption and a luxury tax rolled in one. 

And to that I would say, no, don’t confuse the two.

We can all breathe a sigh of relief for the moment, since this order has now been revoked after consultation with the Ministry of Finance. But that cancellation statement should be gazetted as well, I hope, for the sake of transparency.

At the same time, this little U-turn has given us a lesson – that there is a need for the public, the lawmakers, the consumer groups and the media to constantly monitor the announcements by government departments.

In an ideal world, I would add that there is a need for government departments to issue out statements to all media regarding such orders in the future. – June 22, 2017.

* Hafidz loves to ruffle feathers and believes in the EA Games tag line of challenging everything. Most times, he represents the Devil’s Advocate on multiple issues.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.


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Comments


  • I think we need a "Tax Enough Already" T. E. A. Party movement like in the US. The Government is trying to tax us all the way to the grave.

    Posted 6 years ago by Kekus Vult · Reply