It was a flaw-fully wrong decision to scrap GST right after GE14. Although the decision to scrap GST was welcome by both businesses and the consumer, today we witness such decision is indeed flawed and bring the nation to its knees.
While Vietnam and China has long implemented VAT (another cousin of GST) even long before Malaysia implemented GST, we can see that this policy brings stability to the market and country.
After sracpping GST in mid 2018, Malaysia implemented two months tax holiday while putting in place the SST policy. Soon when SST is implemented in July 2018 we saw prices of goods sky rocketed.
During MCO did we see prices of goods came down? In fact no due to the fact causes by scarcity of goods available in the market. While goods delivered by online delivery saw prices increased due to the cost of transportation. So was there any prices decrease due to the implementation of SST? You add the prices of goods which has already included SST and the cost of delivery, you see prices of goods increased across the board.
If the previous Pakatan regime maintain GST perhaps the prices of goods will not increase and the only addition will be cost of transportation. That is I said perhaps.
However that brings us to the discussion of a news report I read recently from an online portal that government may need to dig into GLC companies and forced them to declare higher income dividend.
We all know that commodity prices is down at its historical low especially oil revenue, therefore government fiscal spending has become tight. Therefore it has no choice but to dig into GLC companies such as Khazanah, Petronas and Bank Negara to name a few.
Well the government will be pressing for higher payouts from government-linked investment companies and state-owned firms and consider selling off some assets to help fund its economic stimulus package.
The government has so far announced three stimulus packages worth a total RM260 billion — nearly a fifth of the country’s GDP, to prop up the domestic economy amid the Covid-19 outbreak.
The stimulus also includes a total direct cash injection of RM35 billion from the government, which will raise the fiscal deficit by 0.7% to -4.7%.
We could have migitate this effect to a lesser extend if GST is still around, which contributes to the nation coffer.
The next time around policy makers have to think long term what policy should stay and what should be revoke and not just basing around an election promise that will be detrimental to the nation.