Instead of imposing the goods and services tax (GST), the government should mull increasing taxes on the rich, Pakatan Rakyat leaders said when presenting the alternative Budget 2015 in Parliament on 9 October.

Serdang MP Dr Ong Kian Ming said that the GST should be replaced by Capital Gains Tax (CGT), which is a progressive tax.

“The government often says that GST is good because more than 100 countries (have implemented it), but more than 100 countries also have CGT,” he said at a press conference in Parliament today.

CGT would place the larger part of the taxation burden on the rich, as opposed to the poor bearing the brunt of GST, said the panel that included Pandan MP Rafizi Ramli, Kelana Jaya MP Wong Chen and PAS research centre executive director Dzulkefly Ahmad.

According to Dr Ong, Malaysia has CGT only in the form of real property gains tax which is imposed on transactions of property owned for less than five years. This is partly to curb investors’ speculation in the housing sector which would raise prices and make it difficult for genuine buyers to own homes at affordable rates.

Wong Chen said that the CGT is expected to rake in RM 3 billion in revenue per annum.

Another proposed tax is the inheritance tax, which would only come into effect if an asset valuing more than RM 5 million is transferred from an owner to his or her kin.

“If there was an inheritence tax when Lim Goh Tong was alive, the government would have been able to get back some of Lim’s wealth obtained through profits of a gambling license,” said Dr Ong.

Wong Chen said that he was told by Beruas MP Ngeh Koo Ham, who is a lawyer, that inheritance tax did exist in the past, but was later scrapped.

Rafizi Ramli said that the inheritance tax was targeted at people with “obscene and exorbitant wealth”.

Pakatan has taken a stand against the implementation of GST in its current form due to the imbalance between the increase in the rakyat’s disposable income and the increasing price of goods. Pakatan expressed that Putrajaya would find it a great challenge to implement the tax come April 1 next year.

“If not managed properly, the rakyat, be it the consumer or the business community, will be forced to suffer the heavy economic burden as a consequence,” said the panel.

The purpose of the suggestion to replace the GST with the CGT is to collect more taxes by increasing taxpayer count, but to reduce the amount of tax being paid per person.

“In order to do so, we must uplift the poorer majority to earning a decent living wage, go after the elite tax dodgers, close tax loopholes and better regulate the shadow and non-productive financial activities of the rich and powerful.” Ong explained.

However, Rafizi Ramli said that though these taxes proposed by Pakatan would not generate the full RM 8 billion as the GST would, overcoming this would need the plugging of financial leakages and the adoption of open tenders. -The Rocket