GST: Provide guidelines to curb profiteering

Lisa J. Ariffin | October 21, 2013

Putrajaya must provide adequate guidelines on GST to curb business profiteering, says Chua Tee Yong.

PETALING JAYA: Labis MP Chua Tee Yong has urged Putrajaya to provide detailed information and adequate guidelines to curb business profiteering before it rolls out the Goods and Services Tax (GST).

“It is vital for Putrajaya to provide detailed information and adequate guidelines to curb profiteering. Only with proper knowledge and understanding, can the GST be implemented to its fullest potential,” Chua said in a press statement here.

Chua expressed concern over the implementation of the GST, which is to replace the present Sales and Service Tax (SST).

“The main question here is how do the authorities and public ensure that businesses are not going to include SST in the GST,” he said.

He explained that businesses might not reduce sales tax and proceed to levy the GST on top of the SST, which would “lead to an increase in the price of goods because there are double taxes imposed instead of one”.

“Hence, it is important for the authorities to provide clear information on the abolishment of SST, which would be replaced by GST,” he said.

“Enforcement agencies must also improve their monitoring to prevent profiteering, which would lead to an overall negative impact on the economy,” he added.

In August, Finance Ministry secretary-general Mohd Irwan Serigar said the government was “trying its best” to include implementation of GST in the Budget 2014, which would be announced in Parliament on Friday.

He added that if Prime Minister Najib Tun Razak were to announce the inclusion of GST when tabling the budget, it would take 14 months for the plan to come into effect – thus, “sometime in 2015″.

In response, Chua had previously said the proposed 7% GST was “too high” and urged the government to consider a lower rate, “somewhere between 3 and 4%”.

He further urged the government to disclose the results of their studies on GST to assure the public that its implementation would not have detrimental effects on society.

Last week, Pakatan Rakyat urged Putrajaya to consider structural reforms to address current weaknesses in the economy instead of rushing into implementing the GST.

Pakatan described Putrajaya’s tax reforms as regressive, and cautioned the public to accept the government’s announcements on GST with a pinch of salt.