By Asrul Hadi Abdullah Sani

KUALA LUMPUR, Nov 3 — Bukit Bendera MP Liew Chin Tong wants to know why the government is spending RM22 million on a goods and services tax (GST) study.

The 2010 Budget has an allocation of RM22 million for a study on the implementation of a nationwide GST. This tax will replace the current sales and service tax.

“I think RM22 million is a huge sum for a study. I urge the finance minister to explain what is in the study or what is the content of the study that requires the amount and which consultancy firm is handling the study of the implementation of GST,” he added.

He was speaking to reporters in Parliament today.

He pointed out that GST is an important issue and should be debated at a national level.

“When Australia implemented GST in 1998, it was almost decided in the form of a referendum.

“It is a very serious issue which needs a national debate. It should not be outsourced and decided by a consultancy firm.

“So I urge the minister to explain what is in that RM22 million and also to begin a national debate on whether we need GST or government should cut down its spending,” he added.

He explained that GST is a form of regressive tax and the public should be educated on the difference between regressive and progressive taxes.

“GST will be a tax that cuts across the board and everyone will have to pay it when they purchase something. GST and value added taxes are the same. Everyone has to pay the same amount of tax. It is a form of regressive tax.

“Whether you earn RM1,000 or RM30,000,  when you purchase something you have to pay a tax compared to a progressive tax where if you earn more, you pay more or if you are in a poor income bracket you pay less,” he said.