Less funds for parliamentary constituencies with GST, says DAP
Funds for parliamentary constituencies will also be affected by the Goods and Services Tax (GST) when it is implemented on April 1, Penang DAP lawmakers said.

Bukit Bendera MP Zairil Khir Johari and Bukit Mertajam MP Steven Sim said MPs' allocations would be reduced by 6% even if the tax was not directly charged on the funds.

This is because the services and goods the funds would procure will be subject to the new tax, they said, resulting in money meant for the people going back to the government as tax.

"Whatever supplies procured or projects implemented will carry an additional 6% cost in the form of the GST," they told a press conference at Wisma DAP in Penang today.

In the state, MPs are allocated RM200,000 a year, out of which RM80,000 is meant for small-scale projects such as minor infrastructure work. The remaining RM120,000 is for buying supplies, which are mostly to assist non-profit organisations in the constituency.

With the GST enforced, the two MPs said the real functional value of a Penang MP’s constituency allocation will be reduced to just RM188,000 a year, with RM12,000 going to the tax.

Syerleena Abd Rashid, a Penang municipal councillor from DAP, said the GST would also affect the allocations of councillors. She said the 24 councillors in the Penang Island Municipal Council (MPPP) each received RM55,000 in funds annually, but with the GST, they would pay close to RM80,000 to the federal government in form of tax.

"Some may say 6% is not a lot but the tax will affect people daily. It is a lot of money. "Is GST something we need now?" she said. Earlier this week, Zairil and Sim pointed out that charities and non-profit organisations would also be affected by the GST.

They will no longer enjoy tax exemptions once the tax kicks in, they said, adding that few have noticed the social consequences of the GST on the non-profit sector.

"As we have previously pointed out, due to inadequate government support, charities and non-profit organisations in Malaysia are heavily dependent on donations and corporate sponsorship but with GST, these organisations may end up closing down their operations," they said.

They urged the federal government to give more funding to charities instead of taxing them, and reiterated DAP's demand for the implementation of the GST to be deferred until the country was ready. – January 29, 2015.