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Thursday, November 7, 2013

GST is a beautiful tax, says govt official

Posted on 6 November 2013 - 09:23pm
Last updated on 6 November 2013 - 09:41pm
Lee Choon Fai

KUALA LUMPUR (Nov 6, 2013): Objections and reservations over the Goods and Services Tax (GST), which will be implemented by April 1, 2015, have been attributed to ignorance.

Royal Malaysian Customs Internal Taxes Department director T. Subromaniam said the GST is misunderstood and incorrectly compared to those implemented in other countries.

"The GST is a beautiful tax, but people don't like it because they don't understand it. The critics are probably just ignorant," Subromaniam said during his presentation at the 2014 Budget Seminar in Berjaya Times Square today.

He allayed concerns that the lower income group will be burdened by GST as most of their spending would be on necessities, which are exempted.

"People from the lower income group would be spending 60% to 70% on exempted items such as basic foods and public health care services," he said.

However, opposition politicians have pointed out that the ingredients of exempted items may not necessarily be exempted as well.

Subromaniam also said it is unfair for critics to compare Malaysia's GST at 6% to Singapore's although the latter introduced the tax at 3% in 1994.

He explained that Singapore's GST is a "full-blown version" with few exemptions while many essentials and necessities will be exempted when the tax is implemented in Malaysia.

"Our 6% (rate) is among the lowest in the world," he said.

Subromaniam said Malaysia's GST may see small businesses that earn less than RM500,000 a year, which makes up to 80% of all businesses in the country, exempted from the tax.

He added that the government will be organising more seminars and workshops to clarify the GST and prepare the people for its eventual implementation.

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