RM26b in GST revenue expected

Publication: NST

Date of publication: Jun 28, 2013

Section heading: Main Section

Page number: 008

Byline / Author: By R. Sittamparam; Akil Yunus; Adrian Lai; Zarina Zakariah

THE government will carry out roadshows nationwide to explain the Goods and Services Tax (GST) model it plans to implement, focusing on three key stakeholders, namely the government, industries and consumers.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said this in response to a question from Setiawangsa member of parliament Datuk Ahmad Fauzi Zahari.

He said no decision had been made on when the GST would be implemented and the rates that would be imposed.

"We did not implement the GST when it was first mooted in 2008, as the government wished to focus on fine-tuning several details first.

"This was to ensure that the GST would not burden the people, especially the low-income group.

"We are now conducting a detailed study on the GST based on current market prices and the economic situation."

Ahmad Husni said the government gave strong consideration to implementing the GST because 160 countries worldwide had done so successfully in recent times.

"The world is undergoing an evolution process, not only in terms of technology but also economy, business and taxation.

"The government wishes to adopt an effective tax collection system which will spur economic growth."

Ahmad Husni said the GST would not adversely affect the poor as their basic needs such as rice, sugar, flour, cooking oil, meat and vegetables would be taxed at zero rate under the new system.

"Even healthcare, private education, public transport and housing are categorised as exempt supply. Therefore, the GST will not be incurred at the final stage of its supply."

He explained that contrary to perception, the GST would replace the current Sales and Service Tax (SST) and was not a new taxation system.

"Based on our projections, the government would gain RM26 billion in tax revenue through the GST in 2015 compared with RM20 billion with the current SST.

"The negative views on the GST stem from perception alone," he said, adding that the government had conducted 4,667 programmes from 2010 to June to explain the tax proposal.

The programmes were attended by more than 200,000 people.