KUALA LUMPUR: The lower income group will benefit more from the implementation of Goods and Services Tax (GST) compared to the higher income population, said Prime Minister Datuk Seri Najib Razak.
He said there was still a misunderstanding on the implementation of the tax and it was interpreted as “regressive tax”.
Najib said the mechanism of the tax was progressive as the lower income groups would receive more government benefits from the revenue collected from the higher income groups.
“The GST exemption on basic needs ensures that those with low income will not be affected by the tax, while those with high income will be imposed with higher tax because they spend more.
“The government also assists them through welfare assistance such as BR1M (1Malaysia People’s Aid), school aid, assistance to farmers, fishermen and special payments to civil servants.
“If the high income group did not contribute a bigger amount of tax, these targeted welfare programmes will not be possible,” said Najib in his blog post today.
He also said although the low income group also paid six per cent GST, the benefits they received were high compared with the middle and high income population.
“The government will make sure that the best of quality of welfare will be given to all and the implementation of the tax in Malaysia is balanced with the current economic situation,” he said.