IPOH: Some 40 essential items including rice, sugar and flour will be fully exempted from taxes if the government implemented the Goods and Services Tax (GST) as replacement to the current Sales and Service Tax (SST).
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the proposal was was being studied by the government bef
ore it takes a final decision on the implementation of the GST.
He said at present most of the items were being taxed under the SST.
"The proposal to give the full tax exemption on the essential items will ensure that the prices of the items will not increase if the government decides to introduce the GST.
"Besides that, not all products will be charged full tax under the proposed GST as certain products will be imposed only half of the GST rate," he told reporters after opening a new surau at Kampung Kuang Hilir near here today.
Ahmad Husni said the GST had been implemented in more than 170 countries and it was meant to replace the current SST being practised in the country.
He said the tax rate of the proposed GST would be lower than the SST which stood at between six and 10 per cent.
Asked when the government would introduce the GST, the Tambun member of parliament said a bill relating to the GST needed to be tabled first by the government in the Parliament if it decided to implement the GST.
"The earliest that the bill could be tabled is next year and the GST could only be implemented between 12 to 18 months after the tabling of the bill," he said adding that so far the government had not made any decision on the implementation of the GST.
He said the government was also looking at the possibility of imposing a lower corporate tax and income tax if it decided to implement the GST.
Regarding Budget 2014, which is scheduled to be tabled in Parliament on Oct 25 by Prime Minister Datuk Seri Najib Razak, Ahmad Husni said rural infrastructure development in Sabah and Sarawak would be given priority.
"Both Sabah and Sarawak needed to be developed as economic growth areas and rural infrastructure development in both states is the key requirement in achieving such goal," he added.
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