Singapore Finance Minister Heng Swee Keat had announced during his Budget 2018 speech on February 19th that GST will increase from the present 7% to 9% sometime in the period between 2021 and 2025. When GST was first implemented in Singapore, it was only at a rate of 3%.

This confirms the world-wide trend about GST, that once GST is imposed, only goes up. The sole solution available to prevent GST from going up is to abolish it. This is what Pakatan Harapan is promising, to abolish GST within the first 100 days upon taking power, and restore the previous Sales & Services Tax(SST).

On the other hand, BN continues to laud the GST as necessary to save Malaysia. The choice is clear. By supporting BN, GST will not only be retained but is likely to be increased in future. Only by replacing BN with PH, then GST can be abolished once and for all.

Singapore as a high-income economy can afford to impose GST. However even then, Singapore carefully started off at only 3% because they were concerned about the negative economic impact. This is unlike Malaysia that started off at 6%, causing economic dislocation and cost of living disruption at the expense of the ordinary rakyat.

According to the World Bank, for 2016 the GDP per capita for Malaysia is USD 9,503 whilst for Singapore it is USD 52,961. Singapore can afford implementing the GST because it is a high-income economy with a GDP per capita 5.6 times more than Malaysia. That is why the poor and small businesses are worse off in Malaysia as compared to Singapore.

Ameer Ali Mydin, managing director of popular hypermarket chain Mydin, said that hypermarkets and supermarkets in Malaysia, which control 50% of the grocery market are seeing negative growth because people do not have money. Despite the 5.9% GDP growth rate in 2017, retail sales will be lower because of price rises. Amongst the individual items cited by Mydin is Cameron cabbage gone up by 29% in the last five years, ikan kembung hitam up by 19.5%, Maggi brand chilli sauce up by 38.8% and Ayam brand sardine up by 30.6%.

Low-income economies that have implemented the GST have suffered from rising inflation and higher cost of living. Malaysians from middle-class downwards are discovering what it is like to be relatively poorer, where their real wage growth rate fails to keep up with either the inflation rate or the GDP growth rate.

When Tun Dr Mahathir Mohamad was Prime Minister, he refused to impose the GST when Malaysia faced severe economic crisis, because he knew the adverse economic impact of GST on the poor and small businesses. The present BN regime does not care and is only concerned about filling the financial hole caused by financial scandals, especially the RM 52 billion 1MDB scandal.