Jun 12, 2010

Legalising sports betting can help delay Malaysia's GST implementation

What does sports betting have to do with the implementation of GST in Malaysia? 

The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), have suggested that the tax revenue to be collected from the legal sports betting (estimated at Rm 1 bil to Rm 3bil annually) can be used to fund public expenditures, and thus delay the implementation of GST in Malaysia.  Read media report : Betting revenue can help delay GST implementation

In order to understand why such a the statement was issued, we need to understand the current sentiments on economic issues.

1. The GST has not received acceptance by Malaysian in general. The Government is forced to put on hold the implementation of GST.   Partly because the Government has not done enough publicity to explain its necessity and the people resort to street protests

2. In early May,  the media carried reports that the Goverment may legalise sports betting.   Many people object to legalising sports betting, and have resorted to public demonstrations to express their disapproval.  The objections came from religious bodies, and NGO's, and also from political bodies.

3. Around the same time, another news, this time on the country's economic status surfaced which gloomly mentioned that Malaysia will be bankrupt by 2019 if it does not cut subsidies and rein in borrowings.   The statement  risk bankruptcy by 2019.  was quoted by the Minister in the prime Minister's Deaprtment.   So we were given the impression that the country really needs funding to clear its borrowings

4.  So in order to help clear disputes on the sports betting, ACCCIM issued a statement that rationalises that the tax to be collected from sports betting could be used as additional funds to reduce the country's borrowings, and hence delay GST implementation.

The statement could be an attempt by interested parties to garner support for sports betting to be made legal in Malaysia, using the unfavourable GST as an excuse.

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