Consumers can accept the new tax on goods and services but have many queries

Published: Tuesday October 29, 2013 MYT 12:00:00 AM 

Updated: Tuesday October 29, 2013 MYT 2:40:57 PM

BY ELWEEN LOKE

In the dark: Consumers are still uncertain how the new GST
tax will be implemented. — filepic

GOOD or bad, the debate on the implementation of the Goods and Services Tax (GST) is still up in the air.

It is up to the people themselves to take the initiative to study it and to come up with their own opinion on the matter.

Businessman Peter Kong, 38, said Malaysians should read up and understand the subject matter and not be easily influenced by others.

He said politicians from both the ruling coalition and Opposition would say anything to draw support from the people.

“We must be able to analyse the system rationally, so that we would have a clear mind of how it would affect us,” he told The Star.

Education: Some NGOs say the Government should use the next 17 months to educate consumers about the GST. — filepic

“A lot of people are confused over the tax system because too much time has been wasted listening to the arguments among politicians,” he said.

“They should do their own research and to come up with their own conclusion,” he added.

Siti Suraya Norizan, 25, said she had been hearing people around her discussing about the GST recently.

“I know the GST has been the talk of the town in the last few days, ever since it was announced that it would take effect on April 1, 2015.

“Honestly, I know nothing about the system and how it works,” she said.

Siti Suraya, a food stall trader, said some of her friends were unhappy with the system because they believed that the taxes would lead to price hike in goods.

On a personal level, she said it was too early for her to judge the system, as she did not know how the taxes were levied.

“I hope there would be someone who could explain to me what the GST is all about,” she said.

She added that she would have no problem with the system, as long as prices of goods were maintained.

“I was told that the GST would not be imposed on basic food items such as rice, sugar, salt, flour and cooking oil. I am relieved to hear this,” she said.

The GST is a broad-based consumption tax that affects all parties involved in a multilevel taxation system ranging from manufacturers to retailers.

During the tabling of Budget 2014 on Oct 25, Prime Minister Datuk Seri Najib Tun Razak announced that the 6% GST tax would replace the current Sales and Services Tax.

Nazaba Abdul Halim, 34, said the Government should explain the GST in detail so that all Malaysians could have a full grasp of it.

“They could hold seminars and publish articles in newspapers to give us a clear picture of what the system is like.

“For instance, when the Government said GST is good for the poor, they need to convince by explaining to the people,” he said.

Nazaba, who runs the customer service counter in a hospital, said he could not foresee the impact of the GST, but would keep track on the system’s development.

The Malaysian Indian Women Association president Dr T. Ramanayagam opined that the 6% GST was slightly too high for a start.

“In order to get the people to buy into the new tax, the Government should begin with a lower rate at about 4% then gradually increase it.

“Take Singapore for example, they started the tax system in 1994 with only 3%.

“The rate was increased to the current 7% in the last two decades,” she said.

She said people were more receptive to a smooth transition instead of a sudden change.

Dr Ramanayagam hoped the Government would continue to look into the welfare of the less well-off communities.

Ipoh City Council secretary Datuk Abdul Rahim Md Ariff said the 1Malaysia People’s Aid (BR1M) could cushion the impact of the GST.

“The Government has not only increased the cash aid from RM500 to RM650, but also extended the assistance to households earning between RM3,000 and RM4,000.

“With the cash aid, the lower income group could balance out the GST levied on them,” he said.

State Love and Welfare Society president R. James said it was appropriate for the Government to implement the GST in 2015, as it could use the next 17 months to introduce it to the public.

“People would find it hard to accept the new tax system because they have no knowledge of it.

“It is the Government’s duty to convince the people that there are benefits in the system,” he said.

James said Malaysia needed the GST to create a stronger economic environment and be on par with other more developed countries.

Among Asean countries, only Malaysia, Brunei and Myanmar had yet to adopt the GST mechanism.