GST: The Truth and Lies PDF Print E-mail
Wednesday, 20 August 2014

GST: The Truth and Lies 

Joseph Goebbels, Adolf Hitler’s Propaganda Minister said

If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State

He mentioned that brilliant propagandist technique is it must confine itself to a few points and repeat them over and over. government has not spared it and diligently practicing to persuade the common rakyat into paying TAX… you hear me right .. the low wage earners to pay TAX. They have been playing GST tunes with giant billboards, advertisement on buses, public places, and mass media since last year. Talks and seminars also been organised to reach out more so the implementation on 1st April 2014 has no or less confrontation.

Grow and share together with GST is the mantra and reason is we need to pay tax so that the government can operate. GST is one method of collecting taxes which works better than others.


Is this the truth or is it a lie?


Truth # 1: GST is a regressive TAX.

Lie: GST is a better tax system


Unlike income tax, GST is consumer tax that will affects 100% of Malaysian population irrespective level of income or age. Only 25% out of 28 billion populations are taxable and only less than 20% tax payer contributing to government revenue.


Hence broad base GST is being introduced to punish remaining 75% rakyat whom are not taxable as LHDN unable to collect from the rich. YES, GST is a better tax system that doesn’t spare even beggars.


Truth # 2: Inflation is inevitable

Lie: Improved Standard of Living


The price of consumer goods and services will increase causing higher inflation rate despite being exempted from GST.


For example, rice is basic food item that will be GST exempted. However the process involving rice production such as purchase of seeds, pesticides, factory processing, packaging, transportation and more will be subject to 6% GST tax. Production cost will increase that result rice price to soar up. Imagine if a stall owner’s cost to make nasi lemak increases with GST 6% taxable on water and electricity, much expensive raw food. Ultimately the cost will be passed to you, the consumer. Indirectly GST will influence the price hike on every goods and services inevitably higher inflation rate. is similar to services such as health and education. Look at the image below published by the LHDN emphasising NO GST subjected to consumer. Similar to our nasi lemak story, hospital will be subjected to 6% tax for medical supplies, equipment, cleaning services, laboratory fee and ambulance etc that will indirectly increase operational cost. Undoubtedly costs will be passed on to consumers one way or the other despite no GST charged.  Certainly rakyat will have to fork out more to afford health services and those poorer will suffer more eventually leading to poor standard of living.


On a different note, the list of 41 GST exempted goods and services promised by the government was never shared or published.



Truth # 3: Wider and Worsening Income Disparity Gap

Lie: GST stimulates better economy rich will get richer and pampered by the government. The corporate tax has been reduced from 40% in 1980’s to 25%. Now there is a plan to reduce it further proves government prioritise profit making business than plain poor low income rakyat.


Truth # 4: GST breeds poverty and other problems

Lie: GST will help Nation-Building


Different problems for the poor if GST implemented. According to a research done by Katherine S. Newman and Rourke L. O’Brien in United States particularly, in the American South where poor families subjected to regressive tax causes unrecognized ways to poverty-related problems like obesity, early mortality, the high school dropout rates, teen pregnancy, and crime. Their study shows how regressive sales taxes similar to GST intended to replace the missing revenue—taxes that at first glance appear fair—actually punish the poor and exacerbate the very conditions that drove them into poverty in the first place.

GST will be the root cause for many other social problems that may not visible now. A strong nation is determined by the higher living standard of its population and GST obviously leading the opposite way.


In a nutshell, it seems GST is a Robin Hood story gone wrong. The poor will be robbed to ensure the rich and corporate remain comfortable in Malaysia. When the rich and powerful use their positions to oppress and starve the ordinary people, ONLY UNITED RAKYAT could challenge it.

As the famous Germany philosopher says

All truth passes through three stages. First it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.

So open your eyes to truth to free from the blinding lies. Say NO to poverty breeding GST.




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