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Monday, November 4, 2013

GST will ensure that errant business operators pay their dues

Publication: NST
Date of publication: Nov 4, 2013
Section heading: Business Times
Page number: 002
Byline / Author: By Zaidi Isham Ismail

THE next time you eat at your favourite restaurant, please glance through the receipt.

The restaurant operator would have imposed sales and service tax or other taxes besides the food charges.

But have you ever wondered whether these monies actually end up in the government's coffers?

How can we, as consumers, be assured that these business operators pay the sales and service tax proceeds to the government?

Unlike public-listed companies that are tied to the principles of transparency and accountability, private business operators, on the other hand, don't declare results of their audits, don't hold annual general meetings and almost never make public the sales and service taxes that they have collected and how much they have paid to the government.

A tax consultant at Deloitte Malaysia said some small firms that collect the sales and service tax more often than not don't channel the money to the government.

As a result, the government is bleeding financially and at a time when it is going all out to cut the fiscal deficit, the goods and services tax (GST), which is set to roll in April 2015, is the almost perfect tool to ensure that the unscrupulous practice by some business owners comes to an end.

Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah said last week the government is expected to collect RM23.1 billion and RM32 billion in GST during the nine-month period (April-December) of 2015 and in 2016, respectively.

He added that if the government is to continue with the sales and service tax in 2015, it will only collect RM14.8 billion.

GST is not perfect, but at least it will crack the whip on errant business firms in paying their taxes.

It is a system that runs by itself.

Under the GST, business operators spanning from manufacturers, wholesalers, traders, retailers will be forced to register under a GST business directory because if they do not register those business entities, they will not be able to enjoy the GST rebate.

It's time business operators paid their dues and help the government in building the nation.

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