Disgraced former prime minister, Najib Abdul Razak said (in The New Straits Times) that he introduced the Goods and Services Tax (GST) to curb the illegal outflow of money from the country.
Oh dear! It didn’t stop him from taking money out of the country, to purchase homes, gems etc.
Najib claimed that under the GST, the total cost of the entire network of suppliers was monitored, allowing the government to detect companies that set unusually high or low prices for goods that were imported or exported.
“GST restricts companies from carrying out dishonest trading as they are monitored by the government. I have repeatedly stated that a large share of GST collections, compared to the Sales and Services Tax (SST), was from those who avoided taxes and from illegal economy, and not from the ordinary people.
“The implementation of GST has also enabled us to have a broader tax base of income, which subsequently allows us not to rely heavily on corporate tax.
“Should our tax rates were reduced to the rates imposed by low-tax countries, dishonest trading will not take place.”
(i) It didn’t work because Jho Low and others in his inner circle managed to siphon funds out of Malaysia.
(ii) Remember the paper money trail which the Panama papers revealed.
(iii) Read the Department of Justice dossier on MO1. Najib and Jho Low manage to spirit money out of Malaysia.
(iv) Then again, perhaps, it did work and maybe that is why he had to store several hundreds of milllions ringgits in various apartments in Kuala Lumpur.