Govt now raising awareness of GST, says Ahmad Maslan

Published: Tuesday July 2, 2013 MYT 3:13:00 PM
Updated: Tuesday July 2, 2013 MYT 3:18:59 PM

BY YU JI

Ahmad Maslan

KUCHING: The much talked about Goods and Services Tax (GST) will only be implemented next year, said Deputy Finance Minister Datuk Ahmad Maslan.

"I don't see it being possible this year," Ahmad told reporters here on Monday. "Next year (is) more likely. We'll have to wait for the Budget (2014) to be tabled in October. 

"I think many announcements will be made then," he told reporters at an awards ceremony for

Royal Malaysian Customs Department here.

Ahmad said while he was aware of a timeframe and method for implementation, he declined to be specific, saying "let the Finance Minister make the announcement".

Pressed further, however, he indicated GST would be implemented.

"Yes, the Opposition is against it. But that would be like taking a step back (for a developing economy). 

"The GST has been studied for many years. It has gone through a thorough review. Analysts and

economists agree it is a fair and effective manner of public revenue collection. For one, it will help plug the leakage of the black or shadow economy."

Ahmad said the Government was working on raising awareness on the GST. 

For instance, he said the Government wanted to reassure the public that daily necessities like "rice, sugar, vegetables and others" would be exempted from GST.

"Also it is not correct to say GST is an add-on, since Malaysians are already used to paying Sales and Services Tax, which the GST will replace, not add on."

Among ASEAN countries, only Malaysia, Brunei and Myanmar were without the GST mechanism. Brunei, Ahmad said, is a welfare state, abundant in natural resources and with a small population.

"As for Myanmar, well, we all know the country has not reached that point in developing their economy yet. Around the world, 160 countries have GST. The GST is practised by the majority of the countries in the world."

GST is a consumption tax, he said, adding high spenders would incur more taxes.

Asked if the GST would initially be introduced at the Sales and Services Tax rate, Ahmad was circumspect. He also did not reply to a question regarding the possibility of an increasing GST rate as a way to minimise its impact, as practised by other countries that implemented GST.

"We are studying the best model, but that is not to say we will follow the models of other countries. What we want is a fair and effective mechanism, which will not lead to out of control inflation," Ahmad said.

He said GST would come under the purview of the Customs Department. 

"The customs will play the most important role. People have had the wrong impression that Inland Revenue Department would collect GST, which will collect only personal and corporate taxes."