'Fears over GST unfounded'

Published: Monday October 21, 2013 MYT 12:00:00 AM 

Updated: Monday October 21, 2013 MYT 9:23:11 AM

PETALING JAYA: The public’s fears over the goods and services tax (GST) are unfounded as they would pay less compared to the current sales and service tax (SST), Malaysian Association of Tax Accountants (Mata) president Abd Aziz Abu Bakar said.

He said a GST of between 4% and 7% should not adversely effect a consumer who now pays a 10% sales tax and 6% service tax.

“In addition, basic necessities are exempted from GST so there should be no changes in prices for these goods,” he added.

Abd Aziz said based on their discussions with the Customs Department, public transportation, toll and financial services would not attract GST.

He said the GST was a tax levied on the supply of goods and services at each stage of the supply chain from the manufacturer to the retailer.

“They are currently passing on the cost of the SST to consumers. The GST is a mechanism to ensure that this does not happen,” he said.

HSS Advisory Sdn Bhd CEO Datuk Harjit Singh Sidhu said most Malay­sians were still in the dark on the impact of the GST as there was no clear explanation from the Govern­ment.

“The general perception is that the GST is going to be a burden,” he added.

He said should the Government consider introducing the GST in Budget 2014, it should be fixed at 4% because the public was still unfamiliar with the tax.

Harjit also proposed for the current tax exempt bracket to be raised from RM2,500 and below to RM5,000 to enable taxpayers in this bracket to cope with the recent increase in fuel cost and the impending GST.

MTUC president Mohd Khalid Atan urged the Government to put off implementing the GST yet.

“Consumers will have to bear the consumption tax if GST is implemented and this will definitely affect the poor,” he said.

In Malacca, Deputy Finance Minister Datuk Ahmad Maslan said the implementation and initial percentage rate of the GST would likely to be unveiled in Budget 2014.

He said the GST, which has been implemented in many countries worldwide, would see a lower charge rate than the current 16%.

Prime Minister Datuk Seri Najib Tun Razak will table Budget 2014 in Parliament on Friday.