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Thursday, November 7, 2013

Tax consultant advises businesses to prepare for GST now

Published: Thursday November 7, 2013 MYT 12:00:00 AM 
Updated: Thursday November 7, 2013 MYT 2:24:31 PM

KUCHING: Now that the Goods and Services Tax (GST) has been announced in Budget 2014, local businesses should begin preparing for its implementation in 2015 as early as possible.

Crowe Horwath (Sarawak) Tax Sdn Bhd director Hudson Chua said it would be beneficial for businesses to get ready for GST sooner rather than later.

“Malaysian businesses are now realising that GST will be a reality, so it’s important for them to understand its mechanism and how to implement it in their systems,” he told reporters during a budget and tax outlook seminar here yesterday.

Under Budget 2014, a GST of 6% would be implemented from April 1, 2015.

According to Crowe Horwath tax executive director Fennie Lim, GST is a broad-based consumption tax which applies to the supply of goods and services at every level of the supply chain.

“GST is not just a tax issue, it is a business issue as it affects every aspect of a business, from finance and administration to procurement, sales and marketing, information technology and human capital.”

Lim, who was one of the speakers at the seminar, also said worldwide experience showed that businesses which commenced their GST implementation projects early had a much smoother process and better track record for compliance after implementation.

“Hence, in developing an optimal implementation strategy to the companies, it is opportune to make preparations now in view of the time required to understand the implications of GST.”

Other speakers included Crowe Horwath Kuching office partner-in-charge Kenny Chong, tax lawyer Siti Fatimah Mohd Shahrom of Lee Hishammuddin Allen and Gledhill, CH Williams Talhar Wong and Yeo Sdn Bhd director Yip Phooi Leng and Crowe Horwath welath management associate director Alvin Yap.

On property-related measures announced in the Budget, Chong said although the minimum selling price of property to be purchased by foreigners had been increased to RM1mil, this would not affect the market in Sarawak as there were not many foreigners buying properties in the state.

Yip commented that property prices in Kuching would continue to go up due to the increase in the cost of building materials with the implementation of the GST.

“Nonetheless, transaction activities are expected to slow down, especially in the primary market, with the drastic changes to the real property gains tax (RPGT) and tightening of loan facilities.”

The seminar was the third stop in a nationwide roadshow jointly organised by Crowe Horwath and RHB Bank Bhd.

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