INSIGHT
By JOCELINE TAN (The Star)

Chief Minister Lim Guan Eng’s hold on the Chinese in Penang is still quite complete but he should not take Datuk Seri Najib Tun Razak’s direct approach to the community too lightly.

THE bombshell that Tun Dr Lim Keng Yaik dropped on Gerakan two days before the Chinese New Year spoilt the mood for many of his party people in Penang.

It was one of those unkindest cuts of all – a blow at the lowest point of the party’s history and during an auspicious date for the Chinese.

DEC 16 — Malaysia faces the prospect of dwindling income from petroleum since petroleum is a depleting resource and will not be there forever. After suffering the curse of oil, which has resulted in massive misuse of petrol money and wasteful expenditure like massive buildings and bailouts, we are now staring at a future without oil money.

To cover for the loss of income from oil, GST is to be implemented in a year or two.

In theory, GST is a good tax, and it will be good for the country if income is growing and people's earnings are expanding.

GST taxes on goods consumed and so is a form of consumption tax. It expands the revenue base of the government, and as a form of consumption tax, it discourages wastage and encourages wiser spending by individuals and hence may be considered a form of “green” tax.

The Prime Minister Datuk Seri Najib Razak recently announced that the government would be introducing Goods and Services Tax (GST). The GST bill which will be tabled at the end of December 2009 parliamentary session is planned to be implemented towards the end of 2011 or early 2012.

For what it’s worth, it must be said that the goods and services tax (GST) proposed by the Prime Minister will definitely be a ghost to haunt him in his political career. To tell you the truth, I was somewhat impressed that such undertaking was even considered, knowing that the PM and the Barisan’s hold on power is hanging by a thread, retrospectively speaking. Many a ruling government were ruined by such bold attempts.

The GST, in a nutshell, is a tax on goods and services in transaction through retail end of the supply chain. That is, it taxes consumers for doing what we do best – consume. In normal circumstances, a retail GST would lead to a marginal rise in prices depending on the rates imposed. Another unpopular attribute to the GST would be its regressive nature; to be precise, the tax burden is greater on those who spend a subsequently larger proportion of their respective incomes. That is to say, a person earning RM1,000 and thus had to spend a larger proportion of his or her income on food, clothing and other necessities would feel the burden much more that those earning, say, RM5,000.