Nuffnang Add

Thursday, November 7, 2013

GST can boost govt revenue by 30pc

Publication: NST
Date of publication: Nov 7, 2013
Section heading: Business Times
Page number: 016
Byline / Author: By Roziana Hamsawi

KUALA LUMPUR: THE planned goods and services tax (GST) regime will help tackle leakages in the supply chain of manufactured goods and help boost government revenue by as much as 30 per cent, said Customs Malaysia adviser Datuk Zaleha Hamzah.

"We estimate that under the current sales tax system, the government can only collect 70 or 80 per cent of the real value of taxes to be paid. But through the GST, it is possible to collect up to 90 per cent," she said after a GST briefing by the Customs Department to the senior management of The New Straits Times Press (Malaysia) Bhd (NSTP) at Balai Berita, here, yesterday.

Also present at the briefing were NSTP group managing director Datuk Abdul Jalil Hamid, Berita Harian group editor Mahfar Ali and Harian Metro group editor Datuk Mustapa Omar.

Zaleha pointed out that the GST, which will come into effect on April 1 2015, can help widen the government's revenue as the tax system is one that is self-policing.

Under the current sales tax regime, some manufacturers have avoided registering themselves in the tax system as there is no incentive for self-registration, Zaleha said.

When this happens, the companies end up not paying any tax to the government.

With the GST, there are enough incentives to flush such rogue businesses out into the open.

For example, the GST ensures that small-time manufacturers or producers, with a revenue less than RM500,000 a year, will be allowed to redeem their input tax.

The GST also encourages smaller businesses to be more open as the bigger players in the sub sectors prefer to do business with companies registered with the GST system.

With this in mind, Zaleha said based on the experience of other countries which have implemented GST, some 40 per cent of companies not in the GST category voluntarily registered to be in the tax system.

On a another matter related to the GST, Zaleha said perception was a powerful tool.

She said there are Malaysian consumers who believe that under the current system, they are not taxed for buying certain goods such as clothes.

"This perception is inaccurate because all this while, they are already paying for sales taxes embedded in the prices of goods," said Zaleha.

As such, she added, the GST provides better transparency, allowing consumers to see the amount of tax they pay when they buy a product.

This is because, the tax portion will be stated in the receipts or invoices.

No comments:

Post a Comment