In a recent parliamentary session, Lim Guan Eng, Member of Parliament for Bagan and former finance minister, called on the government to reconsider its recent tax measures, including the 2% increase in service tax and the implementation of the high-value goods tax (HVGT). He proposed deferring these taxes until the economy shows more positive growth by the end of 2024.
The service tax hike, which raised the rate from 6% to 8%, took effect on March 1, while the HVGT is scheduled to be implemented on May 1. Guan Eng emphasized the need to alleviate the financial burden on individuals and businesses, especially given the current economic challenges.
In addition to his tax-related concerns, Guan Eng also urged the government to establish a national reform congress to demonstrate its commitment to both economic and political reforms. He emphasized the importance of inclusivity in such a congress, ensuring that no community feels marginalized or neglected.
Earlier in the debate, Muhyiddin Yassin, former prime minister, expressed concern that the service tax hike could disrupt the overall supply chain, potentially leading to price increases for various goods. He also called on the government to reconsider its plan to rationalize petrol and diesel subsidies, given the hardships faced by the people due to rising prices and taxes.
Guan Eng also addressed claims regarding the depreciation of the ringgit, stating that financial experts and economists have not deemed it as serious as portrayed by the opposition. He pointed out that unlike in 2020, there has been no downgrade in the country's credit rating, indicating a more stable economic situation.
He compared the current situation to the credit downgrade that occurred in December 2020 under the previous government, describing it as more severe and reflective of a more concerning economic performance. Guan Eng referenced the #BenderaPutih campaign during the Covid-19 pandemic in 2021, where people used white flags to symbolize their need for assistance, highlighting the economic hardships faced by many Malaysians.
Overall, Guan Eng's call for a review of new taxes and a focus on economic reforms underscores the need for government policies that prioritize the well-being of the people and support economic recovery.
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