DAP calls for the withdrawal of two budget proposals - increases in passport and drive licence fees

- Malim Nawar DAP Branch dinner
by Lim Kit Siang

(Malim Nawar, Saturday): DAP calls for the withdrawal of two budget proposals, namely the increases in passport and driving licence fee increases which are most unfair.

The hefty increase for fees for an international travel document from RM145 and RM265 to RM300 and RM600 and the fees for restricted travel documents from RM60 to RM150 and the increase from RM20 to RM50 a year for motor vehicle driving licence should be withdrawn as imposing hardships on ordinary Malaysians.

The increase in passport fees impose a special hardship on Malaysians who work or study overseas and there should be an exemption for persons falling under these categories. Similarly, as having a motor vehicle driving licence has become a necessity rather than a luxury, the hefty increase in motor driving licence rates would have an inequitable effect on the poorer strata of the society.

The increase in passport fees will bring in an additional revenue of RM130 million while an increase in motor vehicle driving fee an additional RM150 million. This RM280 million additional levy on the people could have been avoided if the corporate tax reduction had been reduced from 30% to 28.5% instead of 28%, for this half per cent difference in corporate tax would have exceeded the RM280 million estimated to be collected from the passport and motor driving fees increases.

The Finance Minister has indeed given a surprise present in his budget by reducing corporate tax by two per cent from 30 per cent to 28 per cent as the depreciation of the ringgit has caused an increase in the cost of operation and per unit cost of production which had eroded the competiveness of Malaysian manufactured products in the international market.

Finance Minister, Datuk Seri Anwar Ibrahim said in his budget speech that the two per cent reduction in corporate tax is to enable the private sector to absorb the increase in costs and not pass them on to the consumer. Entrepreneurs, he said, should not burden consumers with price increases.

However, what mechanism is there to ensure that the two per cent reduction in corporate tax would be translated into reduced consumer prices in keeping with the objective of the tax reduction and not be a give-away to the private sector?

And this is not a puny giveaway. The reduction of the corporate income tax from 30% to 28% means a loss of RM1.2 billion in revenue or a RM1.2 billion subsidy to the private sector ensure that consumers are not burdened with price increases as a result of the depreciation of the ringgit.

Is the Government prepared to set up a special agency to monitor and track how this RM1.2 billion boon from the two per cent reduction in corporate tax would really be enjoyed by the consumers, and that the corporate sector would not be double beneficiaries in pocketting not only the RM1.2 billion but in further raising consumer prices.

Economists are highly skeptical that the RM1.2 billion boon from two per cent reduction in corporate tax would be passed on directly or finally to the consumers. If they are right, then this is a very inequitable aspect of the 1998 Budget at a time when everybody should share equally in facing the hard times for the government is squeezing RM280 million from the ordinary Malaysians in terms of increased passport and driving licence fees, while on the other hand, it is giving away RM1.2 billion in corporate tax to the rich and well-to-do.


*Lim Kit Siang - Malaysian Parliamentary Opposition Leader, Democratic Action Party Secretary-General & Member of Parliament for Tanjong