GST untuk Pak Menteri...

 

PKR Polls 2022: Not all about Anwar...

After 2 public debates (see here and here), a feisty campaign and a low voter turnout of less than 13% of PKR’s 1.1 million members, the preliminary results from PKR’s party elections results are in.

The main headline — the victory of outspoken, confrontational Rafizi Ramli over the more soft-spoken conciliatory incumbent secretary-general Saifuddin Nasution Ismail for the deputy president position.

Rafizi’s allies secured most of the senior leadership positions, although incumbents holding state leadership positions such as Menteri Besar Amirudin Shari in Selangor and MB Aminuddin Harun in Negeri Sembilan won, as did leaders with strong independent name recognition such as Adam Adli as youth chief.

Despite low turnout among members, PKR’s 2022 polls were largely a victory for democracy. PKR has led the way in bringing about democratic practices in a party election, with a record number of members directly selecting the party leadership. While there have been concerns raised about voting irregularities, PKR has put in place processes to review any problems and dubious voting, and made improvements to strengthen the electoral process. 

The detailed election results will be announced later in the week, but the unofficial results point to significant changes inside PKR. These will, in turn, impact the party’s relationship within Pakatan Harapan (PH) and with voters.

Rise of younger generation leaders

Foremost is the rise of a younger generation of leaders. Over 10,000 candidates contested, with a slew of incumbents losing their positions. Long-standing prominent party stalwarts from Shamsul Iskandar Md Akin of Melaka (Hang Tuah Jaya) to Johari Abdul of Kedah (Sungai Petani) lost to younger challengers. We also see the displacement of incumbents in Hulu Selangor, Sekijang and Batu.

After the Sheraton Move and subsequent party purge of those seen to be tied to the Azmin Ali cartel, PKR’s 7th party election provided an opportunity for renewal. What has emerged is a regeneration; an endorsement of younger leaders that have either stayed loyal to the party’s reformist ideals or strengthened the party through their government positions. 

As is happening across PH parties, those in the middle ranks of the party have now assumed more important leadership positions, as many of those who founded PKR during the height of Reformasi, such as Tian Chua, have been displaced. 

There are now new leaders at the helm who claim their reformist credentials from more recent times (notably, since 2008) and have greater connectivity to Malaysia’s young electorate.

Anwar’s loss

Inevitably, the generational shift affects the standing of older leaders, not least for its party president. Anwar Ibrahim has long been seen to personify the party and its struggle. This is no longer the case. 

In fact, the party polls were arguably an erosion of support for Anwar. While he maintained his hold on the presidency without contest, many of those closest to him, including Saifuddin, Farhash Wafa Salvador Rizal Mubarak (contesting in Gombak) and Johari, lost.

Anwar’s quiet endorsement did not favour those he supported. Quite the opposite. Anwar’s lack of enthusiasm for Rafizi and defensive reactions to his criticisms of the party’s performance backfired. Many who voted for Rafizi were, in fact, voting against Anwar’s record at the leadership helm. There was also open resistance to decisions made by Anwar, as occurred in Alor Gajah where dropped candidate in Melaka state polls, Ginie Lim, won this division.

The party mandate Rafizi has received positions him as an alternative leader to Anwar. The clarion call for Anwar to step aside will become louder as there is now another person to lead the party in the coming 15th general election (GE15).

This will not sit well with the party supremo, who has yet to accept that PKR’s future will be determined by other leaders than himself.

From divided camps to factions

PKR’s party election shows that Anwar has less control of his own party. There is the emergence of diverse, more decentralised power centres. Unlike in the 2018 party polls, where competition among leaders, personality differences and expectations of zero-sum loyalty to the Azmin or Rafizi camps contributed to party splits and conditions that led to the Sheraton Move, the current situation is different. 

Rather than 2 camps, there are now multiple factions, with less strong personality loyalties and greater competition. Men and Malays have won most of the elected positions. One striking development has been an erosion of multi-ethnic and gender representation in the results. Men and Malays have won most of the elected positions.

The voting patterns, nevertheless, reveal considerable variation and complexity in voting.  Of the results posted, they reveal highly competitive contests, with many contests where voting was evenly split.

Many divisional contests came down to a few (less than 20) votes, such as Sik, Subang, Kluang, Kalabakan, Sembrong, Padang Besar, Masjid Tanah, Sri Gading, Segamat, Teluk Intan, Pekan, Parit, Kuala Nerus, Kuala Langat, Kuala Pilih, Kota Bharu, Dungun, Simpang Renggam, Tanjong Manis and Kinabatangan. Many voted for individual candidates in their own right or for smaller clusters of candidates rather than an approved slate of candidates in 2 different camps. This explains, for example, why Rafizi’s allies failed to win all of the vice president or youth chief positions.

While PKR still has divisions, these appear — at least at this stage — to offer greater opportunity for the party to come together and rebuild trust rather than operate in different personality-tied war zones. Crucial will be whether Rafizi adopts a more conciliatory approach towards those he abandoned in 2018 during his respite from politics, and whether Anwar steps away from a long-standing pattern of pitting younger leaders against each other.

Disquiet and trouble

PKR’s internal issues have profoundly affected PH’s political fortunes. The Sheraton Move was tied to divisions inside PKR. As with Umno, PKR’s polls shape Malaysia’s political future. If PKR remains focused internally, this will negatively impact the opposition’s fortunes and its own party’s performance, already at record lows.

The issue of coming together goes beyond PKR, to include how the party’s new leadership will — or will not — work with its opposition allies. Rafizi has had a strained relationship with PH partners in the past and is seen to be resistant to including youth party Muda as part of the opposition moving forward.

It remains to be seen whether those in new leadership positions in PKR have a new vision for the now broader opposition to work collaboratively. Rafizi’s victory brings with it disquiet among other opposition parties, given that his campaign was implicitly critical of PKR’s coalition partners and did not embrace new parties. 

The party, however, that has the most to be concerned about from this result is Umno. The PKR election has energised the opposition, with greater political debate and attention to the need to focus on policies and re-engage the electorate. Umno and former president Najib Razak have been put on the defensive.

Meanwhile, Umno’s leadership remains stagnant and embroiled in court cases, with its party election and the opportunity for younger leaders to rise delayed. Comparatively, PKR’s new leadership is more dynamic and offers younger Malays as leaders to the electorate. This will be especially the case if Anwar finally chooses to step aside and allow younger leaders to move Malaysia forward.

While PKR has a (very) long way to go to recover political ground and will need political allies, the changing of the guard shows that the party is no longer all about Anwar. - Dr Bridget Welsh

Roti canai and teh tarik to cost more from 

June – will be worse if Najib’s GST is still here...

Finding a piece of “roti canai” or a small glass of “teh tarik” at RM1 each, even in the remotest area is extremely difficult, if not impossible. Roti canai – a piece of round plain flat bread – is essentially one of Malaysia’s favourite dishes that is cheap and good for breakfast, lunch and even dinner. Restaurants have either reduced the size or increased the price.

 

But beginning next month, the prices of both food staples will officially become more expensive as restaurant owners are hit with increase prices of ingredients, despite claims by Finance Minister Tengku Zafrul and Economics Minister Mustapa Mohamed last week that inflation or prices of goods are still very low and under control. The government insists the inflation is at merely 2.2%.

 

Some restaurants had already increased the price of roti canai, selling between RM1.20 and RM1.70 a piece. But that could go up again next month to RM2.20 – about 30% increase. A glass of teh tarik could go from RM1.80 to RM2.50 – almost 40% increase. Some operators of mamak restaurants have increased prices of other foods as well, such as “murtabak” by RM1.

Malaysian Muslim Restaurant Entrepreneurs Association said 25 kilograms of wheat flour has gone up from RM45 to RM65. To make matters worse, there is hoarding of wheat flour to raise prices, creating shortages. The price increases and shortages came despite assurance from the Domestic Trade and Consumer Affairs Ministry that India’s wheat export ban would not affect local supply.

But the rising costs of wheat flour isn’t the only factor. The price of margarine has shot to RM100 from RM85, claimed Malaysian Indian Muslim Restaurant Owners Association (Presma). Other ingredients like cooking oil has also gone up – a five-litre bottle which used to cost RM27 is now being sold by suppliers at RM44, a jaw-dropping 63% jump. The story did not end there.

The increase in national monthly minimum wage effective May 1, from RM1,200 to RM1,500 – a whopping 25% – also means hiring has become more expensive, worsen by a shortage of foreign workers. Operational costs such as rentals, which also saw an increase, had forced restaurant operators to take extreme measures such as terminating free WiFi, even closing down their business.

Vote UMNO/BN,GST will be back 100%,

Chief penyamun UMNO dah cakap...

No matter how vigorously you punch the calculator, the food inflation is definitely more than 2.2% claimed by the clueless and incompetent Ismail Sabri government. Now, if you think the current situation is horrible, imagine what will happen if the 6% GST (Goods and Services Tax) introduced during the Najib administration in April 1, 2015 is still effective today.

Of course, PM Ismail Sabri, trumpeted as a humble leader by his hardcore supporters, despite showing off his RM5,500 Burberry designer shirt during a meeting with his Singapore counterpart, hadn’t a clue about the people’s suffering on the ground. Even ex-PM Najib, born with a silver spoon, is still very eager and excited to bring back his pet-project – the GST.

As recent as two weeks ago, during his debate with Opposition Leader Anwar Ibrahim, Mr Najib insisted that the people would be better off now if the Goods and Services Tax (GST) was still around. He claimed GST would have given the country an additional income of RM30 billion, which could be used as an aid for the people during the current trying times.

Najib bragged – “We collect GST when times are good, and when times are tough, we use the money to help people who are in need. For me, we would be better off now if the GST were still around”. He talked as if the GST is the best invention since sliced bread, the magic wand that Fairy Najib could use to give away free cash to the people struggling to put food on the table.

Firstly, if indeed GST is such an amazing magical tool, why didn’t the Perikatan Nasional regime bring back the tax regime since March 2020? Wasn’t Najib one of the lawmakers who had supported Muhyiddin Yassin in toppling the democratically-elected Pakatan Harapan government so that he can become the backdoor PM, the same man who had supported the abolishment of GST?

Yes, Muhyiddin was a strong supporter of Najib’s GST – till his 45-year stint with Barisan Nasional ended in July 2015, when his boss sacked him as deputy prime minister. But when Muhyiddin joined the Opposition to overthrow Najib, he flip-flopped and condemned the consumption tax, only to praise the tax, calling it to be reinstated just days after he became the prime minister in March 2020.

People Protest Najib GST 

The burning question is – why didn’t the powerful and influential Najib push hard enough for the return of GST, the same way he had aggressively pushed for multiple EPF withdrawals, after he succeeded in helping Muhyiddin formed the Malay-Muslim Perikatan Nasional government? Even if both do not see eye-to-eye, Muhyiddin had lost power since August 2021.

Today, the United Malays National Organization (UMNO) is the government. Exactly why hasn’t Najib done anything in the last 9 months to reinstate the GST? Muhyiddin agreed and so did Finance Minister Zafrul, who has hinted that the tax could be re-introduced. Nobody within UMNO, the backbone of Barisan Nasional backdoor government, disagrees over the revival of GST.

Yet, Najib only dares to blow his own horn during the debate – whining and bitching about how Pakatan Harapan abolished the GST and reverted back to the Sales and Services Tax (SST) after it took over the government after the May 2018 General Election. What the heck is he waiting for now- “Malu apa bossku”? (What’s the shame, my boss?)

Secondly, just because essential items such as rice, fish, meat, seafood, milk, eggs, fruits, vegetables, bread and groceries were exempted from the tax regime, it does not mean the food items will not see any price increase. For example, after the GST was implemented in 2015, a famous “nasi kandar” restaurant hiked the price of its “roti canai telur” from RM1.80 to RM2.50 (almost 40%) due to GST.

And the post-GST price increase for roti canai in 2015 happened when the world was super peaceful without Ukraine war or global inflation, mind you. Did you notice that after the GST, the price of almost everything goes up, from roti canai to lobster and from Coke to car. A plate of RM6 fried kuey teow went up to RM7 and a pack of RM5 nasi lemak shot to RM6 – all prices increased by more than 6%.

Does that mean GST is bad and evil? Not at all, but in the hands of the corrupt and incompetent UMNO government, everything becomes toxic. Because of its broad consumption base, people cannot evade or avoid the GST, making it incredibly efficient, so much so that the government earned RM44 billion in revenue in 2017, making it the largest contributor after corporate tax receipts.

Even though Najib and his minions quietly told the gullible Malay village folks that GST was designed to tax the rich ethnic Chinese and reward the poor ethnic Malay, his racist marketing lies did not last long. Every single citizen, regardless of race and religion, was quickly affected by price increases – from baby milk powder to groceries and from fast food to basic entertainment.

 

Only one out of every 10 Malaysians pay their income taxes. Coincidentally, 90% of the income tax is paid by the Chinese in Malaysia, admitted former Prime Minister Mahathir Mohammad. Meaning, since it was implemented from April 2015 to June 2018, the GST collected more taxes from the Malays than the Chinese simply because the ethnic Malay is the majority race, hence the largest consumers.

UMNO and Corruption,Like the bamboo and the river bank...

Thirdly, despite GST is a more efficient tax regime than SST, it failed spectacularly due to government corruption, inefficiency and incompetence. Because it is a tax on the value added at each stage of the production distribution chain, the final price when reaches the consumers were gigantic because at every stage of the distribution chain, the price increase was not 6%, but higher.

So, a product that cost RM1 could cost more than 6% in GST (excluding profits) if each stage of the production distribution chain slapped 10%, 20% or higher tax bracket disguised as profits in anticipation of problems in claiming excess amount for over-paying the GST liability. Worse, it was tedious and troublesome to submit a refund application with the necessary details on the GST portal.

 

They were correct not to trust the government. According to the GST law, a GST refund should be made to the taxpayer within 14 days (for online submission) or 28 days (for manual submission) from the day Customs received the submitted return. However, the Customs can carry out an investigation or audit to validate the GST return – it has a period of 6 years to conduct field audits.

 

After Najib stunningly lost power in 2018, the new government of Pakatan Harapan found that as of May 31, 2018 the outstanding GST refund amount stood at RM19.39 billion. Even some 20 months later in February 2020, about RM7.8 billion of outstanding refunds for the GST have yet to be repaid to taxpayers, causing cash flow of businesses to be negatively impacted.

It was already bad that the GST is a complicated tax to administer, requiring huge amount of paperwork and time. It became worse when the Royal Malaysian Customs Department dragged their feet due to inefficiency. The government agency took their own sweet time to conduct field audits, trying very hard to find faults so that they can demand bribes from business owners before approving refunds.

In July 2021, in the first case of its kind in Malaysia, the High Court allowed a judicial review application to challenge the decision of the customs in rejecting the taxpayer’s application for input tax credit refund (ITC refund). The refund was rejected because the Royal Malaysian Customs argued that it was not made within 120 days from the appointed date, when in fact it could be made within 6 years.

 

The best part was when the Pakatan Harapan government discovered that GST refunds for businesses to the tune of RM19.4 billion went missing from government coffers during former Prime Minister Najib Razak’s tenure. The “missing money” had been quietly moved to the government’s consolidated account instead of the GST refund account.

Why did crooked Najib transfer the money away? That’s because the corrupt and spendthrift government ran out of money, hence the GST refund money was diverted to pay for development and management costs. While Najib insisted no money was stolen, the fact remained that the money did not belong to the government to be spent as and when the PM likes.

As a result, GST refunds were not paid for two years because 93% of the money had not been placed into the correct account. In a letter dated October 9, 2018 to the Public Accounts Committee (PAC), then-Attorney General Tommy Thomas said it was a breach of fundamental trust law principles and trust accounting requirements, and that “criminal liability must be further considered.”

One could only imagine what will happen to the diverted RM19.4 billion had the corrupt Najib administration not defeated in 2018. Most likely, the money will be permanently missing. Delayed refunds will result in a negative impact to cash flow, leading to an increase in the cost of doing business. That explains why price increases were many times more than the 6% GST.

Generally, businesses will pass down any taxes to consumers, and in the process raise prices. Additionally, any extra cost of compliance to new laws such as the GST will also be parked under consumers. Therefore, if GST still exists today, roti canai and teh tarik will definitely be more costly. It’s true that GST can help curb leakages and tax fraud.

But in the case of Najib and UMNO, it was the government who committed leakages and fraud. The biggest problem is that the irresponsible government tends to steal and plunder when faced with a sudden flush of money. Sri Lanka is an example of countries struggling with poorly conceived and implemented GST regimes. And we know what happens to Sri Lanka today. - FT

cheers.