Wednesday, October 23, 2013

Goods and Services Tax (GST) 101: It is No Cure of Malaysia Financial Malaise

For those of you who are not quite familiar with the topic of GST, here is a summary from the media statement of Tony Pua, Member of Parliament for Petaling Jaya Utara on Tuesday, 22 October 2013, which gives you an idea of why GST is no cure of Malaysia Financial Malaise

The proposal to impose the Goods and Services Tax (GST) is a direct result of the BN-led administration's waste, extravagance and leakages.

Idris Jala, the Minister in Prime Minister's Department, has issued a statement to strongly support the implementation of the GST as a panacea to the persistent deficit and increasing debt which Malaysia suffers today. 

Under such policies, the poor would be hit by a double whammy in tax burden. Firstly, the poorer income groups be forced to bear the burden of the reduced income tax of the higher income groups. On top of that, they will be hit by a regressive tax regime which taxes the poor proportionately more than the rich.  

For example a person who earns RM1,000 will be spending practically the full amount of his monthly earnings without any savings. This expenditure will be taxed at an assumed 5 percent GST.  

A person earning RM20,000 per month may spend RM12,000 of his income while saving or investing the balance. He will pay 5 percent on his RM12,000 expenditure, which works out to RM600. 
Based on this sum, the wealthier person is effectively paying only 3 percent tax on his income. Hence the natural impact of the GST is proportionately higher on the poor than on the rich.

This is diametrically opposite to the current progressive income tax structure which raises the percentage of taxes payable at higher income brackets.

Hence if the government were to impose the GST as an excuse to lower income tax rates, then it is effectively abdicating from its obligations and role of social justice and wealth redistribution. 
Instead, the GST and reduced income tax rate will only worsen the already worrisome income inequality in the country.

Cut extravagance instead

Instead of Idris arguing that "we need to broaden the tax base" because only approximately 15 percent of the working population pays taxes today, the government should be asking why the remaining 85 percent are not earning enough to pay taxes after decades of so-called rapid growth and economic development.  

We must remember that it is not because these 85 percent do not want to pay tax, but because they don't earn enough to be eligible to do so. 
It should be noted that the income tax brackets have not been modified for nearly two decades and the question is why the overwhelming majority of workers are still earning suppressed wages at less than RM2,500-3,000 per month. 

In addition, it should be argued that decades of strong and rapid economic growth boasted by the BN administration should have enriched the government with annual surpluses and record savings.

Instead, despite the chest-thumping over the government's ability to manage the economy, we now find ourselves in persistent deficit while the federal government debt has ballooned to RM546 billion, without taking into account another RM150 billion of known contingent liabilities.

The cure for the financial malaise lies not in taxing the people more, especially taxing those who barely earn enough to meet the rising cost of living. The panacea lies in the political will to cut wastage, patronage, extravagance and corruption in government expenditure.

Due to the fact that we are fortunately blessed with oil and gas revenues, as well as an enviable economic growth record over the past decades, the government actually have enough funds in its coffers. What it has however failed to do, is to ensure that these funds are properly utlised and invested. 

Until this government learns and proves to the people that it knows how to manage the rakyat's hard-earned monies in an honest, professional and efficient manner, it will have no right to raise more taxes from the people, especially from the middle-income and the poor


Saturday, October 19, 2013

3 Simple Reasons I Disagree with "Allah" Ban

Why should you care about the "Allah" ban, especially if you are not a Christian or Sikh? After all, it won't affect your lives right? Well, you might want to think twice. If you are still unaware of the issue, please take some time to read this as it will affect how we move forward as a country in the history of Malaysia. 


According to historical manuscripts, Arabic-speaking Muslims, Christians and Jews have collectively used “Allah” referring to God for more than 1,400 years. In Malaysia, the Sikh and East Malaysian Bumiputra and Orang Asli Christians (who constitute 60% of the church in Malaysia today, and mostly Bahasa Malaysia-speaking), have been using the word “Allah” both before and after the independence of Malaya and the formation of Malaysia. The use of the word “Allah” by the people of other faiths had not been an issue in Malaysia all these years.


In 2007, the Home Ministry banned the use of "Allah" in the Malay section of The Herald, a weekly publication of the Catholic Church, arguing that it could confuse and cause offence among the Muslims in Malaysia, subsequently threatening national security. The Catholic Church challenged the order. In 2009, the Kuala Lumpur High Court ruled that the word “Allah” was not exclusive to Muslims only and that all Malaysians had the right to use the word under the Constitution which guarantees freedom of expression and religion.

 The government then filed an appeal and recently, the 3-member bench Court of Appeal unanimously decided to overturn the KL High Court decision. It pronounced the use of "Allah" in The Herald unlawful and unconstitutional. The Catholic Church will now go to the Federal Court, Malaysia’s highest court, to challenge the judgment of Court of Appeal. 


There are many good pieces written by different groups on why the Court of Appeal judgment is flawed (listed at the end). Before you read the 'heavy stuff' with more detailed explanations, here are 3 simple reasons why I say NO to the "Allah" ban: - 

1. Fundamental Human Rights for all Malaysians

It is simply unreasonable for any Malaysian to be denied their fundamental freedom to express their religious beliefs on the basis that it might cause confusion to some people. Isn't it better to educate the easily confused, instead of restricting the rights of others? As a matter of fact, before the "Allah" ban in Malaysia, Muslims around the world have not been confused sharing the word "Allah" with the Jews and Christians for more than one thousand years. 

2. It Is Simply Not Practical

Even if the ban is constitutionally and morally legitimate, the enforcement of the ban is simply not practical. 

Is the "Allah" ban only for The Herald? If yes, then the ban will not serve its purpose of avoiding confusion because other non-Muslim materials apart from The Herald can still use the term "Allah”. What's the point of imposing a ban which cannot serve its purpose?

Or does the ban apply to all materials of other faiths? If yes, what about a foreigner who comes to Malaysia with non-Islam materials containing the term "Allah"? Do we confiscate the materials in the airport? If yes, then our Customs will have trouble scanning all materials for the term "Allah" as there is no such scanning equipment available. And do we charge the foreigner in court for "smuggling" non-Islam materials with the term "Allah"?

As I am writing this, the government announced that the "Allah" ban will not affect the Christians in Sabah and Sarawak (knowing their fixed deposit is seriously at stake). That further complicates the practicality of the ban. Does the ban apply only in West Malaysia? What about the Christians from Sabah and Sarawak who reside in West Malaysia? How then can the enforcement unit decide on who and where "Allah" can or cannot be used? 

I shall not elaborate further. In short, this "Allah" ban is simply not practical. 

3. For the Future of Malaysia

Most importantly, the "Allah" ban will seriously hurt the unity of this already divided and segmented nation. 

How do we build an inclusive society when a certain segment can claim the exclusive right to use certain term? 

Imagine how we are going to tell our little children that only in Malaysia, "Allah" is exclusive for the Muslims and at the same time, convince them that Malaysia is a united country. You may think this situation is still bearable and hence can't be bother. Nevertheless, remember the story of the frog-in-the-boiling water? 

It is the little by little encroachment of human rights by the government and the little by little compromise by the society that  we may end up an oppressive and divided nation in the future. 

How we, as a society, collectively react to the "Allah" ban will shape the future of this nation. Therefore, speaking against it now is crucial if we are serious about building a united Malaysia where freedom is enjoyed by all Malaysians regardless of race, religion, culture, language and geography. 


We, the wakil rakyats, are elected to be the voice of conscience for all Malaysians. 

Just a month ago, I spoke up against workplace discrimination of women in tudung based on the principle of human rights and the right of Muslim women to be free from any forms of discrimination (link). By the same token, I wish to speak against the Court of Appeal ruling over the ban of using the word "Allah".   

I know many UMNO cyber-troopers who conveniently label me as a Christian evangelical politician will now use this political stand as their weapon of attack. However it is my duty as an elected representative to make a political stand without fear or intimidation based on the principle of human rights and in consideration for the future of this nation.

Therefore, I say NO to the "Allah" ban. 


Further readings:-

1. Media Statement by the Bar Council on Court of Appeal Judgement on "Allah" Issue 
2. In the Name of Allah, The Economist
3. No One Has Monopoly Claim to God, The Jakarta Post
4. Would Malaysia be formed if Court of Appeal Allah Judgement was the Law of the Land, by Lim Kit Siang