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Thursday, November 14, 2013

Body: GST a way to boost nation's economy

Published: Saturday November 9, 2013 MYT 12:00:00 AM 
Updated: Saturday November 9, 2013 MYT 2:14:11 PM

SIBU: The most talked about measure by the Government, the Goods and Services Tax (GST ) is perhaps the answer to further strengthen the Malaysian economy.

Managing partner of Ernst & Young (E&Y) East Malaysia, Yong Voon Kar, said due to the increasingly challenging economic outlook and given that only a small fraction of the total population was currently contributing to the Government’s coffers, it was inevitable that the GST needed to be put in place. Prime Minister Datuk Seri Najib Tun Razak in tabling Budget 2014 last month, said that GST would be implemented in April 2015.

“Although there are some 16 months before GST kicks in, businesses should take action early as the implementation involves detailed understanding and thorough preparations,” Yong said in his opening speech at the EY 2014 Budget Seminar recently.

Meanwhile E&Y executive director Koh Siok Kiat said the reality was that GST was much more than just output and input tax.

“The many rules and guidelines for different sectors of the economy have to be digested and applied correctly to avoid unpleasant surprises a few years down the line. Any mistake might prove to be costly as it could not be discovered until a few years after the GST returns are audited,” he said.

Incidentally, there would be double deduction incentives for businesses in terms of related training for staff in accounting and ICT as well as accelerated capital allowance for ICT equipment, which should be useful as businesses would need to beef up their ICT facilities for GST purposes.

“This year there are not many new incentives as consolidation efforts need to be stepped up to boost our fiscal position,” said E&Y partner Robert Yoon. At the seminar, the participants were also given a glimpse of subtle changes to the Income Tax Act, which was “hidden” in the Finance Bill (No 2) 2013.

“Some of the amendments proposed appear to encroach on the fundamental rights of taxpayers. For instance, a taxpayer may not have any avenue to appeal against a deemed assessment except under limited circumstances where a taxpayer is aggrieved as a result of complying with a public ruling issued by the Internal Revenue Board (IRB),” said E&Y tax director Ng Siaw Wei.

She stressed that it might therefore become crucial to address these grey areas early and more importantly, to call for the relevant authorities to reconsider this proposal before its finalisation.

There was another proposal that would give IRB the power to disallow a tax deduction on an expenditure as long as the information or documents requested to justify a tax claim were not provided within the time stipulated by the board.

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