Is DAP saying that GST is welcome as long as they get half of the collections?

Dato’ Eric See-To

DAP Secretary-General Lim Guan Eng wants Malaysia to follow the example of Australia and return part of the GST collections to the state.

In particular, he wants the Federal Govt to give 50% (or 3% GST) back to the states.

There is a danger in making simplistic statements such as this without considering other factors.

For example, Australia’s GST is 10% versus 6% in Malaysia.

Australia’s personal tax rate is also much higher. Australia starts taxing their residents when their salaries are just $1500 per month at a rate 19% – versus 0% for those whose income is RM4,000 per month or less in Malaysia.

Australia’s personal tax rate goes up to 37% for their middle income versus 24% for Malaysia while their highest earners are taxed at 45% versus 28% for Malaysia.

While Australia’s company taxes are 27.5% for SMEs versus 17% in Malaysia and 30% for larger companies versus 24% in Malaysia.

Making populist and selective statements is easy but the reality is a lot more complicated than that.

If Guan Eng was an opposition politician in Australia, he would probably be claiming that Australians are badly oppressed and struggling to survive while the country is going bankrupt as Australia’s household debt to GDP ratio is 125%.

The DAP already says the same thing about Malaysia by citing that Malaysia’s household debt to GDP is a “staggeringly high” 84%.

Source: Eric See-To.