Roti Canai & Teh Tarik To Cost More Next Month – Here’s Why The Cost Of Living Will Be Worse If Najib’s GST Is Still Here

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May 30 2022
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Finding a piece of “roti canai” or a small glass of “teh tarik” at RM1 each, even in the remotest area is extremely difficult, if not impossible. Roti canai – a piece of round plain flat bread – is essentially one of Malaysia’s favourite dishes that is cheap and good for breakfast, lunch and even dinner. Restaurants have either reduced the size or increased the price.


But beginning next month, the prices of both food staples will officially become more expensive as restaurant owners are hit with increase prices of ingredients, despite claims by Finance Minister Tengku Zafrul and Economics Minister Mustapa Mohamed last week that inflation or prices of goods are still very low and under control. The government insists the inflation is at merely 2.2%.


Some restaurants had already increased the price of roti canai, selling between RM1.20 and RM1.70 a piece. But that could go up again next month to RM2.20 – about 30% increase. A glass of teh tarik could go from RM1.80 to RM2.50 – almost 40% increase. Some operators of mamak restaurants have increased prices of other foods as well, such as “murtabak” by RM1.

Roti Canai - Teh Tarik

Malaysian Muslim Restaurant Entrepreneurs Association said 25 kilograms of wheat flour has gone up from RM45 to RM65. To make matters worse, there is hoarding of wheat flour to raise prices, creating shortages. The price increases and shortages came despite assurance from the Domestic Trade and Consumer Affairs Ministry that India’s wheat export ban would not affect local supply.


But the rising costs of wheat flour isn’t the only factor. The price of margarine has shot to RM100 from RM85, claimed Malaysian Indian Muslim Restaurant Owners Association (Presma). Other ingredients like cooking oil has also gone up – a five-litre bottle which used to cost RM27 is now being sold by suppliers at RM44, a jaw-dropping 63% jump. The story did not end there.


The increase in national monthly minimum wage effective May 1, from RM1,200 to RM1,500 – a whopping 25% – also means hiring has become more expensive, worsen by a shortage of foreign workers. Operational costs such as rentals, which also saw an increase, had forced restaurant operators to take extreme measures such as terminating free WiFi, even closing down their business.

Ismail Sabri and Lee Hsien Loong - Burberry Designer Shirt RM5500

No matter how vigorously you punch the calculator, the food inflation is definitely more than 2.2% claimed by the clueless and incompetent Ismail Sabri government. Now, if you think the current situation is horrible, imagine what will happen if the 6% GST (Goods and Services Tax) introduced during the Najib administration in April 1, 2015 is still effective today.


Of course, PM Ismail Sabri, trumpeted as a humble leader by his hardcore supporters, despite showing off his RM5,500 Burberry designer shirt during a meeting with his Singapore counterpart, hadn’t a clue about the people’s suffering on the ground. Even ex-PM Najib, born with a silver spoon, is still very eager and excited to bring back his pet-project – the GST.


As recent as two weeks ago, during his debate with Opposition Leader Anwar Ibrahim, Mr Najib insisted that the people would be better off now if the Goods and Services Tax (GST) was still around. He claimed GST would have given the country an additional income of RM30 billion, which could be used as an aid for the people during the current trying times.

Najib and Rosmah Boarding Private Jet - Happy GST Everyone

Najib bragged – “We collect GST when times are good, and when times are tough, we use the money to help people who are in need. For me, we would be better off now if the GST were still around”. He talked as if the GST is the best invention since sliced bread, the magic wand that Fairy Najib could use to give away free cash to the people struggling to put food on the table.


Firstly, if indeed GST is such an amazing magical tool, why didn’t the Perikatan Nasional regime bring back the tax regime since March 2020? Wasn’t Najib one of the lawmakers who had supported Muhyiddin Yassin in toppling the democratically-elected Pakatan Harapan government so that he can become the backdoor PM, the same man who had supported the abolishment of GST?


Yes, Muhyiddin was a strong supporter of Najib’s GST – till his 45-year stint with Barisan Nasional ended in July 2015, when his boss sacked him as deputy prime minister. But when Muhyiddin joined the Opposition to overthrow Najib, he flip-flopped and condemned the consumption tax, only to praise the tax, calling it to be reinstated just days after he became the prime minister in March 2020.

Muhyiddin Yassin - I Lover PM - Najib Razak

The burning question is – why didn’t the powerful and influential Najib push hard enough for the return of GST, the same way he had aggressively pushed for multiple EPF withdrawals, after he succeeded in helping Muhyiddin formed the Malay-Muslim Perikatan Nasional government? Even if both do not see eye-to-eye, Muhyiddin had lost power since August 2021.


Today, the United Malays National Organization (UMNO) is the government. Exactly why hasn’t Najib done anything in the last 9 months to reinstate the GST? Muhyiddin agreed and so did Finance Minister Zafrul, who has hinted that the tax could be re-introduced. Nobody within UMNO, the backbone of Barisan Nasional backdoor government, disagrees over the revival of GST.


Yet, Najib only dares to blow his own horn during the debate – whining and bitching about how Pakatan Harapan abolished the GST and reverted back to the Sales and Services Tax (SST) after it took over the government after the May 2018 General Election. What the heck is he waiting for now- “Malu apa bossku”? (What’s the shame, my boss?)

Mamak Restaurant - Worker Making Roti Canai

Secondly, just because essential items such as rice, fish, meat, seafood, milk, eggs, fruits, vegetables, bread and groceries were exempted from the tax regime, it does not mean the food items will not see any price increase. For example, after the GST was implemented in 2015, a famous “nasi kandar” restaurant hiked the price of its “roti canai telur” from RM1.80 to RM2.50 (almost 40%) due to GST.


And the post-GST price increase for roti canai in 2015 happened when the world was super peaceful without Ukraine war or global inflation, mind you. Did you notice that after the GST, the price of almost everything goes up, from roti canai to lobster and from Coke to car. A plate of RM6 fried kuey teow went up to RM7 and a pack of RM5 nasi lemak shot to RM6 – all prices increased by more than 6%.


Does that mean GST is bad and evil? Not at all, but in the hands of the corrupt and incompetent UMNO government, everything becomes toxic. Because of its broad consumption base, people cannot evade or avoid the GST, making it incredibly efficient, so much so that the government earned RM44 billion in revenue in 2017, making it the largest contributor after corporate tax receipts.

People Protest Najib GST 

Even though Najib and his minions quietly told the gullible Malay village folks that GST was designed to tax the rich ethnic Chinese and reward the poor ethnic Malay, his racist marketing lies did not last long. Every single citizen, regardless of race and religion, was quickly affected by price increases – from baby milk powder to groceries and from fast food to basic entertainment.


Only one out of every 10 Malaysians pay their income taxes. Coincidentally, 90% of the income tax is paid by the Chinese in Malaysia, admitted former Prime Minister Mahathir Mohammad. Meaning, since it was implemented from April 2015 to June 2018, the GST collected more taxes from the Malays than the Chinese simply because the ethnic Malay is the majority race, hence the largest consumers.


Thirdly, despite GST is a more efficient tax regime than SST, it failed spectacularly due to government corruption, inefficiency and incompetence. Because it is a tax on the value added at each stage of the production distribution chain, the final price when reaches the consumers were gigantic because at every stage of the distribution chain, the price increase was not 6%, but higher.

UMNO Gravy Train - Petrol Taxes - GST - Corruption

So, a product that cost RM1 could cost more than 6% in GST (excluding profits) if each stage of the production distribution chain slapped 10%, 20% or higher tax bracket disguised as profits in anticipation of problems in claiming excess amount for over-paying the GST liability. Worse, it was tedious and troublesome to submit a refund application with the necessary details on the GST portal.


They were correct not to trust the government. According to the GST law, a GST refund should be made to the taxpayer within 14 days (for online submission) or 28 days (for manual submission) from the day Customs received the submitted return. However, the Customs can carry out an investigation or audit to validate the GST return – it has a period of 6 years to conduct field audits.


After Najib stunningly lost power in 2018, the new government of Pakatan Harapan found that as of May 31, 2018 the outstanding GST refund amount stood at RM19.39 billion. Even some 20 months later in February 2020, about RM7.8 billion of outstanding refunds for the GST have yet to be repaid to taxpayers, causing cash flow of businesses to be negatively impacted.

GST Charged on Food

It was already bad that the GST is a complicated tax to administer, requiring huge amount of paperwork and time. It became worse when the Royal Malaysian Customs Department dragged their feet due to inefficiency. The government agency took their own sweet time to conduct field audits, trying very hard to find faults so that they can demand bribes from business owners before approving refunds.


In July 2021, in the first case of its kind in Malaysia, the High Court allowed a judicial review application to challenge the decision of the customs in rejecting the taxpayer’s application for input tax credit refund (ITC refund). The refund was rejected because the Royal Malaysian Customs argued that it was not made within 120 days from the appointed date, when in fact it could be made within 6 years.


The best part was when the Pakatan Harapan government discovered that GST refunds for businesses to the tune of RM19.4 billion went missing from government coffers during former Prime Minister Najib Razak’s tenure. The “missing money” had been quietly moved to the government’s consolidated account instead of the GST refund account.

Ex-Prime Minister Najib Razak - World Biggest Crook

Why did crooked Najib transfer the money away? That’s because the corrupt and spendthrift government ran out of money, hence the GST refund money was diverted to pay for development and management costs. While Najib insisted no money was stolen, the fact remained that the money did not belong to the government to be spent as and when the PM likes.


As a result, GST refunds were not paid for two years because 93% of the money had not been placed into the correct account. In a letter dated October 9, 2018 to the Public Accounts Committee (PAC), then-Attorney General Tommy Thomas said it was a breach of fundamental trust law principles and trust accounting requirements, and that “criminal liability must be further considered.”


One could only imagine what will happen to the diverted RM19.4 billion had the corrupt Najib administration not defeated in 2018. Most likely, the money will be permanently missing. Delayed refunds will result in a negative impact to cash flow, leading to an increase in the cost of doing business. That explains why price increases were many times more than the 6% GST.

UMNO Corrupt Big Shark - Cartoon

Generally, businesses will pass down any taxes to consumers, and in the process raise prices. Additionally, any extra cost of compliance to new laws such as the GST will also be parked under consumers. Therefore, if GST still exists today, roti canai and teh tarik will definitely be more costly. It’s true that GST can help curb leakages and tax fraud.


But in the case of Najib and UMNO, it was the government who committed leakages and fraud. The biggest problem is that the irresponsible government tends to steal and plunder when faced with a sudden flush of money. Sri Lanka is an example of countries struggling with poorly conceived and implemented GST regimes. And we know what happens to Sri Lanka today.


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