Maintain GST rate for five years

Published: Wednesday September 11, 2013 MYT 12:00:00 AM 

Updated: Wednesday September 11, 2013 MYT 8:18:46 AM

IT is heartening that the director-general of the Inland Revenue Board, Tan Sri Mohd Shukor Mahfar, has expressed the possibility of a reduction in the income tax rate with the introduction of the GST.

The GST is a broad-based tax system and a tax on consumption.

With the reduction of income and corporate tax rates, it will spur and encourage entrepreneurship and business activities and growth of capital which all countries need for sustained growth and prosperity.

Furthermore, there is a dire need to reduce the income and corporate tax rates to be in line with our neighbours so as to be competitive and attractive for investments both local and foreign.

Lower income and corporate tax will also discourage the introduction of all types of tax-saving schemes and allow businesses to concentrate on business.

The GST rate should be set to

be revenue neutral except to capture taxes from those who have avoided paying their dues under the income and corporate tax regime.

The GST should not be a tool to generate more tax revenue to burden the people.

Furthermore, many countries have introduced GST at a low rate with the hidden intent to subsequently increase the rate as a easy way of increasing revenue.

The Government must assure us that this will not be so and the GST rate should be maintained for at least five years before any review is conducted.

Such reviews should be conducted transparently and with full justification for any rate change.

However, GST revenue will always rise with the growth of the economy and there should be no reason to increase the rate if our Government judiciously designs our budget with prudence and care.

TAXPAYER

Petaling Jaya