KOTA BARU: The waiving of the goods and services tax (GST) for the East Coast Rail Link (ECRL) project is to ensure that the construction cost of the public transport system remains at the original estimate of RM55 billion.
Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah said the cost of the project would increase by about six per cent if the GST was imposed.
“The ECRL is a government project. So, if we were to impose the GST, then it is as if we are charging the tax on ourselves.
“We are giving this exemption as we do not want the cost of this project to escalate and the government is forced to borrow again.
“So, it is better for us to release the GST to maintain the original cost,” he told reporters at a special briefing for civil servants and employees of the Ministry of Finance here, today.
Responding to a question from the audience earlier, Mohd Irwan side stepped a claim that the government was “surrendering” the country’s sovereignty by allowing huge investments by China’s state-owned companies into mega infrastructure projects such as the ECRL.
He said last year, Malaysia posted foreign investment inflows of RM39.2 billion, most of them not only from China, but also from other countries like Germany, the United Kingdom and Japan.
“We are not surrendering the sovereignty of the country, but we are attracting investments from abroad. The ECRL, for example, the company involved only builds the construction implementation system, while 70 per cent of the workers are locals,” he said.
In the meantime, he said the government would certainly determine the ECRL ticket prices that would not burden the people and deny that they would be very expensive.
“Don’t believe unverified news, the government is very concerned with the welfare of the people and of course, the government will look into this matter as best as possible,” he said. — BERNAMA