Press Releases

United Nations’ report reaffirms Penang Institute’s findings

Penang Institute
Press statement – 24 February 2016, Penang

Dr Lim Kim-Hwa, Chief Executive Officer and Head of Economics
Mr Tim Niklas Schoepp, Chief Operating Officer and Visiting Analyst
Dr Lim Chee Han, Senior Analyst
Ms Ong Wooi Leng, Senior Analyst
Dr Negin Vaghefi, Senior Analyst

The United Nations report reaffirms long held research findings by Penang Institute on the impact of Goods and Services Tax (GST)

The Economic Planning Unit and the United Nations released the “Malaysia Millennium Development Goals Report 2015”. We would like to highlight from the UN report:

  1. The UN report evaluated the wellbeing of Goods and Services Tax (GST) on the bottom 40 per cent household income group. The UN report concluded that “those at the lower end of the B40 spectrum will feel the effect more than those in the upper parts of the spectrum” (p30).
  2. This conclusion from the UN confirms our research finding that GST is a regressive tax on its own. Our full paper, which was released on 8 October 2013 and before the announcement of the introduction of GST, is available from https://penanginstitute.org/gst/.
  3. In follow up press statements, we reiterated our findings that GST is a regressive tax – a tax where the burden is higher on lower income households compared to higher income households.
  4. In our press statements, we also highlighted that the cash hand outs (BR1M) received by lower income households will exceed their GST payments, thus the impact of GST on these households will be mitigated. It is the middle income households who do not receive BR1M who will be worse off after implementation of GST.
  5. Our prior press statements on the issue of GST:
    1. “GST is a Regressive Tax” – 25 October 2013 (https://penanginstitute.org/v3/media-centre/press-releases/504-gst-is-a-regressive-tax)
    2. “GST impact on middle income households” – 31 October 2013 (https://penanginstitute.org/v3/media-centre/press-releases/508-middle-income-households-will-pay-up-to-an-extra-rm-1123-in-tax-per-year-from-2015-how-to-mitigate-this)
    3. “GST impact” – 13 October 2014 (https://penanginstitute.org/press-releases/607-press-statement-on-gst-13-october-2014/)