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Friday, September 20, 2013

CIMB Research maintains Outperform on MyEG, target price RM2.46


Published: Friday September 20, 2013 MYT 8:23:00 AM 
Updated: Friday September 20, 2013 MYT 8:26:37 AM

KUALA LUMPUR: CIMB Equities Research is maintaining its Outperform recommendation on My E.G. Services with an unchanged target price of RM2.46.

It said on Friday it maintained its EPS and target price at 19.1 times CY15 price-to-earnings (P/E), a 20% premium over its 15.9 times index target.

“MyEG remains an Outperform, potentially catalysed by the successful implementation of its custom service tax monitoring system (CSTM) project and the launch of new services,” it said.

CIMB Research said MyEG plans to offer new services for the immigration division and applications for new foreign workers; ii) there could be changes in the government’s policy which could raise demand for its online voluntary vehicle transfer service (VVTS); and iii) a potentially larger customer base for its CSTM, to include the retail sector if GST is implemented,” it said.

The government could announce plans to implement GST at the coming 2014 Budget next month.

“We are bullish on MyEG’s EPS growth over the next two to three years, to be led by new services like VVTS and foreign workers’ annual working permit renewal (FWPR).

“Its longer-term outlook would depend on the success of its CSTM concession, we believe. Its current ‘click-and-pay’ business is getting competitive as more players move into this market.

“As such, management is looking to offer more sophisticated services like machine-to-machine (M2M) businesses,” it said. The CSTM project is an example.

Another potential M2M project the company is working on is road safety diagnostic services (RSDS).

CIMB Research understands that MyEG is currently in preliminary negotiations with the government for this project.

“Investors should continue to accumulate this stock. Its outlook is exciting with potential new projects in the pipeline.

“We have not assumed any earnings from CSTM and RSDS. Based on existing services alone, our three-year EPS CAGR for MyEG is a strong 32.2%. In addition, its business model is defensive with recurring income,” it said.

Maybank Research downgrades Media Prima to Sell


Published: Thursday September 19, 2013 MYT 12:37:00 PM 
Updated: Thursday September 19, 2013 MYT 12:39:51 PM

KUALA LUMPUR: Maybank KE Research is downgrading its rating of Media Prima to Sell from Hold, saying the recent fuel price hike and further subsidy rationalisations will likely have a negative impact on earnings outlook.

It has cut its earnings estimate for the media group by 7-12% and lowered FY14F price-earnings ratio multiple to 13 times, from 14 times previously.

Fair valuation is now set at RM2.40, from RM2.90.

“We note that major subsidy rationalisations in the past have negatively impactedMedia Prima’s adex (advertising expenditure) growth. Still fresh in our mind is the 78 sen/litre fuel price hike and 24% electricity tariff hike in June 2008 that sent its TV adex falling 9% year-on-year in 3Q08,” Maybank Research said.

It believes the recent 20sen fuel price hike will negatively impact MPR’s adex growth as advertisers cut their advertising and promotional budgets to compensate for higher fuel prices.

It said with the Government being committed to reducing the budget deficit, there could be further reviews on subsidies on such things as essential food items, gas and electricity. The GST, scheduled for implementation in 2015, could further dent adex sentiment.

“Media Prima’s year-to-date share price performance has been good, as it up 19% while all its media peers under our coverage are down 1-6%. Therein also lies the threat that its share price will be more vulnerable to a sell-down in the event that subsidy rationalisation and the GST implementation cut its adex growth by more than we expect,” it added.

“We have observed that Media Prima traded at a discount to the FBM KLCI 30 during major subsidy rationalisations and economic uncertainties. Actually, subsidy rationalisations triggered these discounts in the past on expectations of weak adex,” it explained.

Maybank Research said after the 78sen fuel price and 12% electricity tariff hikes in 2008 and during the global financial crisis, respectively, Media Prima traded at an average 2.0 times PER discount to the FBM KLCI 30. After the 7% electricity tariff hike in 2011 and during the Eurozone Sovereign Debt Crisis, it traded at an average 1.5 times discount to the FBM KLCI 30.

As such, the research house believes Media Prima could once again trade at a discount to the FBM KLCI 30.

“Given its less-than-sanguine adex and, hence, earnings outlook, we lower our target multiple to 13 times FY14F PER, or at a 1.9x discount to the historical average FBM KLCI 30 1-year forward PER since 2001 of 14.9x, to arrive at our revised target price of RM2.40.

“We reiterate our view that there may be more downside risk to our earnings estimates and, therefore, to our target price due to subsidy rationalisation/GST implementation,” it concluded.

Thursday, September 19, 2013

Biting the GST bullet — Omar Mukhtar



September 18, 2013

SEPT 18 — “Goods and Services Tax ( GST ) is no longer an option,” said the Ministry of Finance’s Secretary General, Tan Sri Dr Irwan Serigar Abdullah.

It was the last four words in that sentence that created huge waves in the local media, foreign wires and not forgetting the continuous thunderbolts in the social media space.

If I were to paraphrase what he said – there is just no escaping the GST. The big question mark is when will it be implemented and what would the rate be?

The uncertainty to both these questions led to a sudden surge of unofficial opinion-makers. And it came as no surprise that the digital public sphere was suddenly crowded with instant economists, sharing their thoughts and views on GST’s presumed rate, mechanisms and the so-called implications.

It didn’t matter whether what they said actually made sense or not. What was important was that they could contribute to the GST Conversation and say their piece. Whether it was right or wrong – that’s secondary!

After several sessions of surfing, I eventually switched off, as too much rambling and having to sift the truth from garbage becomes just as tiring as real surfing in Brisbane’s Gold Coast.

The next thing I did was to sign up as one of the participants at the GST Training and Awareness Programme organized by MOF and Customs. It was my hope that after the learning session, I could speak intelligently on GST and demystify some of the conflicting views and misinformation that have caused and roused public outcry.

Articles on GST so far, have not been spinned positively. I use the word spin because logical thinking will tell you that the GST cannot just be all Bad and Horrible without any benefit to the nation and its people.

Assuming it was all bad and ugly, then why have more than 170 countries adopted this taxation system? It wouldn’t have made sense, right? But unfortunately, in the Malaysian scene, the GST has received nothing but serious backlash.

I personally think that most people are still very much perplexed about what to expect, cannot fathom what our bills are going to look like and how badly our pocket is going to bleed.

Let’s face the fact – not everyone likes surprises, especially not when it has everything to do with financial implications and nothing to do with your birthday present.

Question: Is it really going to be as bad as it has been hyped up by our instant economists in the social space? Well, let me share some of the takeaways from the training session.

First, in terms of taxation system, we are so behind, that even Laos and Cambodia have overtaken us in implementing the GST. 

Officially, we belong to the last 20 per cent of countries who have not yet adopted the GST system. I’d say, it is quite embarrassing to admit that our taxation system is superiorly outdated.

The current system, which has inherent weaknesses, is neither transparent nor efficient. To begin with we are paying double taxes: 10 per cent sales tax + 6 per cent service tax. With GST, we only need to pay one. So, how bad can that be?

Secondly, because the current taxation system is opaque, there are instances where duplications of taxes occur between sales and goods tax.

As a retailer, you will not realize the multiple taxes that you are paying as the taxes have already been embedded in the end product – and because the different taxes are not stated in your receipt, people seem to just accept without further questions.

The truth is, GST is designed to reduce business costs and provide absolute transparency of taxes at each stage of a business transaction – all the way up to the retail stage of distribution.

With this new system, business owners are able to reduce cost of running their business and by right, should be passing down the savings to customers like us.

Business owners can claim their input taxes back and offset it with the output tax. Mathematically speaking, if there are cost savings at their end, then the cost reduction should also be passed on to us, their retail customers too.

After all, the GST is said to be more efficient, business friendly, transparent and is designed to reduce business costs. It gets better doesn’t it?

Without getting too technical, there are three types of GST taxes – the standard rated, the zero rated and items which are totally exempted from GST.

How does that translate in simple terms? It simply means that some items will remain unchanged, some will increase in price and some will reduce in pricing.

Most importantly, what I took away yesterday was that the country needs to broaden its tax base and reduce reliance on petroleum revenues.

The GST is a more sustainable way of revenue collection - which, in turn, will be ploughed back for the development of the country and its people.

Furthermore, the GST has a greater coverage and it will vary from person to person. This means that everyone will feel the pinch of the GST, but it really depends on what they consume and how often they consume each and every item (except the 40 items which are GST free).

If you are still in doubt, you might just want to ponder these bottom lines.

Malaysia needs to :

Be on par with other nations who have adopted the GST system.

Replace its outdated taxation system to a more efficient one.

Think of its future generation who cannot just rely on petroleum revenues which are unsustainable in nature.

Lastly, it is pointless to just sit back, read and believe everything that is posted on the web. Because smart is when you believe half of what you hear and brilliant is when you know which half to believe.

The GST is imminent. The force will come, but it will not be the end of the world.

Brace yourselves now @ www.gst.customs.gov.my

The wealth of information is there for you to consume and digest at your own rhythm and pace. Happy reading.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.


- See more at: http://www.themalaymailonline.com/what-you-think/article/biting-the-gst-bullet-omar-mukhtar#sthash.6OQ5O1Z4.dpuf

GST: Jangan aniaya rakyat kerana kelemahan BN


Harakahdaily, 
30 Ogs 2013 

KUALA LUMPUR: Dengan ekonomi serantau yang semakin tidak menentu dan kejatuhan ringgit yang mendadak, melepasi 8 peratus tahun ini, PAS berasa amat tidak wajar bagi kerajaan untuk melaksanakan GST.

Ketua Penerangan PAS Pusat, Datuk Tuan Ibrahim Tuan Man berkata, GST bakal memberikan tekanan kos hidup pada rakyat, terutamanya golongan pendapatan pertengahan ke bawah di kawasan bandar lebih-lebih jika kegawatan ekonomi berlaku.

“Jangan kerana kelemahan pentadbiran kerajaan BN, rakyat dianiaya secara berganda dengan penarikan balik subsidi daripada program rasionalisasi subsidi dan kemudian dipaksa membayar lebih untuk barangan keperluan melalui GST di dalam Bajet 2014,” ujarnya dalam satu kenyataan.

Kenyataan penuh beliau.

Pelaksanaan cukai barangan dan perkhidmatan (GST) bukan penyelesaian kepada masalah-masalah yang membawa ekonomi negara ke tahap yang membimbangkan hari ini di mana hutang negara hampir melepasi paras 55% KDNK (Keluaran Negara Dalam Kasar) dan fiskal defisit yang mencecah RM14.9 bilion.

Meningkatkan pendapatan negara melalui GST tidak berguna tanpa penyelesaian sebenar kepada punca ketirisan, pembaziran, kelemahan pengurusan dan budaya penganugerahan projek tanpa tender yang menyebabkan perbelanjaan kerajaan melambung tanpa kawal.

Contoh terbaik yang boleh dilihat rakyat ialah pada projek KLIA2. Projek KLIA2 yang sehingga kini tidak diketahui tarikh siap telah memperlihatkan kosnya meningkat lebih 2 kali ganda daripada RM1.7 bilion pada 2009 semasa ia dimulakan kepada RM4 bilion pada tahun ini.

Apa gunanya pendapatan negara ditingkatkan tanpa menutup ruang kebocoran kewangan di dalam sistem pentadbiran negara?

GST tidak boleh menyelesaikan masalah ekonomi negara yang berpunca daripada ketirisan, pembaziran, kelemahan pengurusan dan budaya penganugerahan projek tanpa tender.

Tanpa pengurusan kewangan yang cekap dan efektif, apa-apa cara mempelbagaikan pendapatan kerajaan hanya merugikan rakyat kerana duit lebih yang dijana akhirnya akan terbazir begitu sahaja di dalam sistem pentadbiran yang penuh kebocoran tanpa membawa manfaat kepada ekonomi negara.

Dengan ekonomi serantau yang semakin tidak menentu dan kejatuhan ringgit yang mendadak, melepasi 8 peratus tahun ini, PAS berasa amat tidak wajar bagi kerajaan untuk melaksanakan GST.

GST bakal memberikan tekanan kos hidup pada rakyat, terutamanya golongan pendapatan pertengahan ke bawah di kawasan bandar lebih-lebih jika kegawatan ekonomi berlaku.

Jangan kerana kelemahan pentadbiran kerajaan BN, rakyat dianiaya secara berganda dengan penarikan balik subsidi daripada program rasionalisasi subsidi dan kemudian dipaksa membayar lebih untuk barangan keperluan melalui GST di dalam Bajet 2014.

Jika kerajaan boleh memikirkan cara seperti meletakkan para peminjam PTPTN di bawah Sistem Maklumat Rujukan Kredit Pusat (CCRIS) (Alhamdulilah, ia sudah ditolak kini) untuk mendapat kembali wang, mengapa kerajaan tidak mahu berusaha memikirkan cara menutup kebocoran kewangan di dalam sistem pentadbiran dan berusaha mendapatkan kembali duit kerajaan yang dibazirkan seperti yang tertera di dalam laporan tahunan audit negara?

Petanda awal Bajet 2014 tidak mesra rakyat


Harakahdaily, 
03 Sep 2013 

KUALA LUMPUR: Pusat Penyelidikan PAS (PPP) melihat bahawa kenaikan harga petrol RON95 dan diesel sebanyak RM0.20 bermula hari ini adalah petanda awal Bajet 2014 yang akan dibentang bulan Oktober nanti sebagai tidak bersifat mesra rakyat. 

Menurut Pengarah Operasi PPP, Dr Mohd Zuhdi Marzuki(gambar) berbanding dengan bajet tahun-tahun sebelum ini yang dilihat sebagai budget mesra rakyat atau lebih tepat mesra pengundi, Bajet 2014 yang bakal dibentangkan akan mula melaksanakan beberapa dasar kerajaan yang tertangguh sebelum ini iaitu rasionalisasi subsidi dan reformasi percukaian. 

“Pelaksanaan tersebut meliputi pemotongan subsidi barangan petroleum, pengurangan perbelanjaan kepada sektor pendidikan dan kesihatan, kenaikan tarif elektrik dan pelaksanaan cukai barangan dan perkhidmatan (GST),” ujarnya dalam satu kenyataan, sebagaimana di bawah. 

Pusat Penyelidikan PAS (PPP) melihat bahawa kenaikan harga Petrol RON 95 dan Diesel sebanyak RM0.20 bermula hari ini adalah petanda awal Bajet 2014 yang akan dibentang bulan Oktober nanti sebagai tidak bersifat mesra rakyat. 

Berbanding dengan bajet tahun-tahun sebelum ini yang dilihat sebagai budget mesra rakyat atau lebih tepat mesra pengundi, Bajet 2014 yang bakal dibentangkan akan mula melaksanakan beberapa dasar kerajaan yang tertangguh sebelum ini iaitu rasionalisasi subsidi dan reformasi percukaian. 

Pelaksanaan tersebut meliputi pemotongan subsidi barangan petroleum, pengurangan perbelanjaan kepada sektor pendidikan dan kesihatan, kenaikan tarif elektrik dan pelaksanaan cukai barangan dan perkhidmatan (GST). 

Kerajaan pentadbiran Datuk Seri Mohd Najib Tun Abdul Razak dilihat terpaksa mengambil langkah ini, ketika desas-desus yang kuat menyebut Malaysia mungkin akan menarik diri dari menandatangani Trans-Pacific Partnership Agreement (TPPA). 

Datuk Seri Najib telah diasak dari dalam dan luar Umno untuk tidak menandatangani perjanjian tersebut yang dianggapkan oleh mereka akan memberi ancaman kepada ekonomi negara khususnya ekonomi kaum Melayu. 

PPP berkeyakinan, sebelum ini pentadbiran Datuk Seri Najib melihat perlaksanaan TPPA sebagai pilihan alternatif untuk mengurangkan beban hutang dan perbelanjaan kerajaan, sekaligus mengurangkan defisit budget yang telah berlanjutan lebih satu dekad yang lalu.

Dengan perkembangan ekonomi Malaysia yang agak beku disebabkan ketiadaan sumber-sumber pendapatan baru, kerajaan pentadbiran Datuk Seri Najib hanya mempunyai dua pilihan utama, iaitu meneruskan dasar-dasar yang telah digariskan oleh jawatankuasa Pemandu yang diketuai oleh Datuk Seri Idris Jala atau menerokai pasaran dan kemasukan modal asing melalui TPPA. 

Berdasarkan beberapa perkembangan sebelum ini, PPP menjangkakan kerajaan pentadbiran Datuk Seri Najib akan memilih untuk menandatangani TPPA yang pada perkiraan beliau akan memberi manfaat kepada lebih ramai rakyat disamping akan meningkatkan Keluaran Dalam Negara Kasar (KDNK), sesuai dengan matlamat menjadikan Malaysia negara berpendapatan tinggi.

Bagaimanapun, perlaksanaan TPPA telah mendapat tentangan kuat dari dalam dan luar Umno termasuk daripada bekas Perdana Menteri, Tun Dr Mahathir Mohammad. PPP percaya tentangan tersebut telah memberi kesan besar terhadap kedudukan Datuk Seri Najib dalam Umno sendiri, serta menggugat kedudukan beliau sebagai Perdana Menteri setelah prestasi buruk BN dalam PRU ke-13 lalu. 

Datuk Seri Najib akan melalui satu lagi episod getir pada hujung tahun ini, iaitu pemilihan pimpinan baru Umno. Kesemua situasi ini menyebabkan Datuk Seri Najib berkemungkinan akan mengambil langkah menarik diri dari menandatangani TPPA, justeru beliau terpaksa memikirkan semula cadangan-cadangan yang telah dikemukakan oleh jawatankuasa Pemandu yang meliputi rasionalisasi subsidi dan reformasi percukaian.

Prestasi ekonomi semasa tidak memberi pilihan yang banyak kepada pentadbiran Datuk Seri Najib dengan ramalan yang kuat berlakunya kemuncupan ekonomi China dan situasi tidak menentu yang berterusan di Timur Tengah. Perubahan yang berlaku kepada kedua-dua wilayah ekonomi ini akan memberi kesan langsung kepada ekonomi Malaysia. 

Pada ketika yang sama, tiada perkembangan yang begitu menggalakkan daripada prestasi ekonomi Asean sejak krisis ekonomi negara-negara anggota pada tahun 1997 dan malah tiada juga perkembangan yang diharapkan selepas pelaksanaan AFTA. 

Dengan hutang kerajaan yang kian meningkat dan hutang isi rumah begitu membimbangkan, PPP melihat ekonomi Malaysia semakin menuju ketidakstabilan.

Berdasarkan realiti tersebut, PPP menjangkakan pelaksanaan bajet dan lain-lain dasar yang tidak mesra rakyat akan berlanjutan sehingga 2015, menyaksikan lebih banyak subsidi yang akan dipotong dalam usaha mengurang perbelanjaan kerajaan. 

Pada ketika yang sama, PPP menjangkakan GST akan mula dilaksanakan secara beransur-ansur dengan mengecualikan beberapa barangan dan perkhidmatan tertentu. 

Golongan yang begitu terkesan dengan budget lain-lain dasar yang tidak mesra rakyat ini adalah golongan pertengahan terutama golongan pertengahan rendah (lower middle class). Manakala dari segi wilayah pula, golongan yang paling terkesan dengan pelaksanaan seperti ini ialah penduduk bandar dan pinggiran bandar.

Kenaikan harga minyak dorong inflasi berganda


Salmiyah Harun, 
03 Sep 2013 

KUALA LUMPUR: Pakar Ekonomi PAS Dr Rosli Yaakob berkata, kenaikan harga minyak sebanyak 20 sen dalam suasana nilai Ringgit Malaysia yang sedang lemah dalam pertukaran antarabangsa akan memberi kesan kepada inflasi berganda.

Katanya, inflasi tinggi akan mendorong harga barang naik keadaan ini akan memberi kesan kepada penurunan nilai ringgit, kesannya rakyat akan terus tertekan kerana menanggung kenaikan harga yang besar

"Harga barang akan berterusan naik, peniaga akan kekal dengan harga baru selepas kenaikan harga minyak tetapi harga barang tidak akan turun walaupun harga minyak diturunkan selepas itu," katanya kepada Harakahdaily.

Beliau yang juga bekas Pengarah Bank Negara Malaysia memberi jaminan harga barang akan naik selepas ini kerana minyak adalah input bahan mentah untuk perkhidmatan dan pengakutan seperti lori, bas dan teksi .

Malah katanya, dengan kenaikkan harga minyak ini kerajaan tidak boleh memberi alasan mudah kononya kerana harga minyak dunia telah naik.

"Alasan ini tidak boleh diterima pakai kerana harga minyak tidak naik sebesar itu. Tetapi kenapa minyak Malaysia tinggi, 20 sen itu tinggi lebih dari 10 peratus," soal beliau.

Justeru katanya, kerajaan telah menganiaya rakyat kerana mereka berbelanja boros untuk tampung kekurangan berlanjawan maka mereka menaikkan harga minyak.

"Kerajaan kita tidak bertanggungjawab kerana belanja boros! Belanjawan semakin besar, untuk mencari punca mendapatkan wang menaikkan harga minyak ini kerana pelaksanaan GST tidak dapat dilaksanakan sepenuhnya kerana mendapat bantahan rakyat.

"Tidak ada jalan lain untuk mendapatkan hasil lebih tinggi bagi membolehkan kerajaan terus berbelanja lebih boros jadi mereka naikkan harga minyak yang merupakan cara paling mudah untuk mendapatkan pulangan," katanya.

Beliau turut menyifatkan kerajaan mungkir janji kerana dalam PRU 13 lalu mereka memberi jaminan tidak akan berlaku kenaikan harga minyak malangnya ia berlaku sebaliknya apabila rakyat terus memberi mandat kepada mereka.

Semalam Perdana Menteri Datuk Seri Najib Tun Razak mengumumkan kenaikan harga minyak RON95 dan diesel sebanyak 20 sen seliter.

Menurut Najib, kenaikan harga minyak merupakan satu proses pengukuhan ekonomi bagi jangka pendek dan sederhana, yang akhirnya bertujuan memberi kesan positif kepada kesejahteraan rakyat.

Sehubungan itu, bermula hari ini RON95 akan berharga RM2.10 seliter manakala diesel pula RM2.00 seliter.

Walaupun minyak naik, syukur M'sia masih aman


Harakahdaily, 
03 Sep 2013 

KUALA LUMPUR: Jika kenaikan petrol dan diesel dianggap hadiah 100 hari kemenangan BN kepada rakyat, sebenarnya banyak lagi ‘hadiah-hadiah’ dalam bentuk penambahan cukai, kenaikan harga barang dan peningkatan kos hidup akan dilaksanakan oleh Najib dari semasa ke semasa. 

Bagi penulis blog Shahbudin Husin, kenaikan minyak adalah permulaannya dan lepas ini akan disusuli dengan tarif elektrik dan cukai GST pula.

“Lepas itu cukai dan kenaikan yang entah apa-apa pula akan diumumkan. Mungkin juga harga minyak akan naik lagi,” tulisnya.

Bagaimanapun di sebalik semua kenaikan ini, masih lagi ada sesetengah rakyat yang berkata, syukurlah Malaysia masih aman! 

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Awas!! Selepas Minyak, Banyak Lagi Kenaikan Sedang Menunggu

Kerajaan mulai malam tadi menaikkan harga minyak petrol RON 95 dan diesel sebanyak 20 sen. Dengan kenaikan itu, harga semasanya menjadi RM2.10 sen dan RM2.00 seliter bagi diesel. Langkah kenaikan yang disifatkan Najib untuk pengukuhan ekonomi itu juga menyebabkan subsidi kerajaan keatas petrol kini menurun kepada 63 sen manakala untuk diesel menjadi 80 sen sahaja.

Kenaikan ini jelas tidak menggembirakan rakyat. Di alam maya, Najib menerima kritikan, cemuhan dan serangan yang berterusan sepanjang malam tadi. Bukan saja rakyat biasa yang rasa terbeban dengan kenaikan itu meluahkan perasaan dan kemarahan mereka, malahan bekas Mufti Perlis, Dr Asri Zainal Abidin dan ahli akademik, Dr Mazleee Malik juga turut aktif di twitter masing-masing dengan pelbagai maklumat yang berupa kritikan dan sindiran mengenai kenaikan itu.

Ahli-ahli politik pembangkang pula tentulah menggunakan peluang ini untuk menghentam dan mengkritik kerajaan semahu-mahunya, apalagi kenaikan petrol dan diesel ini umpama hadiah daripada Najib kepada rakyat sempena 100 hari kemenangan BN.

Buat pertama kali juga, pemimpin UMNO menjadi kurang aktif sama ada si facebook ataupun twitter. Selalunya jika timbul isu-isu sebegini, para pemimpin UMNO yang aktif di dunia sosial turut memainkan peranan mempertahankan apa yang dilakukan kerajaan, tetapi malam tadi ramai yang berdiam diri dan tidur awal agaknya. Mungkin mereka juga sudah tiada idea lagi untuk mempertahankan tindakan Najib itu.

Pengendali laman sosial yang pro UMNO dan kerajaan juga kelihatan pasif dan tidak tidak berdaya lagi mempertahankan langkah tidak bijak Najib itu.

Hanya Bung Mokhtar Radin, Ahli Parlimen Kinabatangan dan Pengerusi Felcra yang cuba mempertahankan dan menyokong kenaikan minyak ini tetapi beliau juga kemudiannya dikritik dan diserang hebat, termasuk mengaitkan dengan perkahwinan keduanya bersama aktres Zizie Ezzette.

Di alam nyata pula, kenaikan ini disambut dengan rungutan dan cebikan mulut daripada rakyat terhadap Najib dan BN. Mulai petang semalam, jalan mulai sesak kerana orangramai berebut-rebut keluar awal bagi mengisi minyak di stesen-stesen minyak sebelum harga baru bermula pukul 12.01 malam.

Ditambah dengan hujan yang turun sejak awal petang, kesesakan bukan saja berlaku di jalan-jalan raya, malahan juga di hampir semua stesen minyak. Ini jelas menggambarkan kenaikan 20 sen tetap memberi kesan kepada kebayakan rakyat dan mereka berusaha untuk menjimatkan perbelanjaan masing-masing sedaya yang mungkin.

Dilaporkan juga terdapat kejadian merosakkan stesen minyak berikutan rakyat menjadi marah selepas beratur lama untuk mengisi minyak, tiba-tiba diberitahu bekalannya sudah habis. Ini menggambarkan bukan saja kenaikan itu dibantah, malahan masa pengumuman mengenai kenaikan itu juga memperlihatkan sikap tidak bijak Najib sehingga mencetuskan suasana kelam-kabut dan panik di kalangan sesetengah rakyat.

Kenaikan minyak kali ini tidak disebut Najib sebagai kesan kenaikan minyak dunia tetapi lebih ke arah pengukuhan ekonomi dan mengurangkan defisit. Najib lantas memberitahu kenaikan harga minyak ini akan diseimbangkan dengan kenaikan BR1M yang akan diumumkan dalam Belanjawan pada Oktober nanti.

Terlihat di sini bahawa Najib mengambil pendekatan ekonomi "tutup lubang, gali lubang" untuk menyelesaikan masalah. Dengan subsidi petrol dan diesel yang dapat dijimatkan, ia kemudian akan disalurkan pula melalui BR1M. Walaupun pemberian tunai BR1M ini mendapat kritikan daripada Mahathir tetapi nampaknya Najib akan terus menggunakan pendekatan itu untuk mengambil hati orang-orang kampung dan rakyat berpendapatan rendah, malah sudah membayangkan akan menaikkan lagi jumlahnya. Kali ini mungkin menjadi RM700, RM 1000 ataupun mungkin juga menjadi RM1200.

Kesan kenaikan petrol dan diesel ini tentu saja akan menyebabkan kenaikan harga-harga barang di pasaran. Walaupun Najib mengingatkan peniaga tidak menaikkan harga barang, tiada jaminan kawalan ataupun penguatkuasaan akan diambil terhadap peniaga yang ingkar. Ia hanyalah sekadar peringatan semata-mata.

Ini bermakna belum pun BR1M dilaksnakan, beban kenaikan harga barang sudah menyusah dan mengeringkan lagi poket rakyat. Bagi yang tinggal di Lembah Kelang dan bandar-bandar lain dan tidak layak pula menerima BR1M, kenaikan harga minyak dan disertai dengan kenaikan harga barang keperluan harian umpama "pontianak" yang menghisap poket mereka sehingga kering setiap hari.

Kenaikan harga minyak ini juga berlaku dicelah-celah ura-ura kerajaan mahu menaikkan tarif elektrik dan melaksanakan cukai GST yang mungkin akan diumumkan dalam Belanjawan nanti. Walaupun propa kerajaan melalui Mahahdir Khalid mengatakan kenaikan elektrik dijamin tidak membebankan rakyat, sebenarnya asal saja namanya kenaikan, ia tetap memberi kesan kepada kehidupan rakyat.

Kerajaan juga bertegas mahu melaksanakan GST. Idris Jala yang merangka mengenainya sudah pun membayangkan hakikat itu. Masalahnya hanyalah berapa peratus saja, mungkin 5 peratus, mungkin 4 peratus dan sebagainya. Namun ia pasti akan dilaksanakan oleh Najib. Tunggu saja berita "gembira" ini dalam Belanjawan nanti.

Jika kenaikan petrol dan diesel dianggap hadiah 100 hari kemenangan BN kepada rakyat, sebenarnya banyak lagi hadiah-hadiah dalam bentuk penambahan cukai, kenaikan harga barang dan peningkatan kos hidup akan dilaksanakan oleh Najib dari semasa ke semasa. Kenaikan minyak adalah permulaannya dan lepas ini akan disusuli dengan tarif elektrik dan cukai GST pula.

Lepas itu cukai dan kenaikan yang entah apa-apa pula akan diumumkan. Mungkin juga harga minyak akan naik lagi.

Bagaimanapun di sebalik semua kenaikan ini, masih lagi ada sesetengah rakyat yang berkata, syukurlah Malaysia masih aman! (SH 03/09/2013)

Tingkatkan pendapatan rakyat, tolak GST


Muhammad Faizal, 
02 Sep 2013 

KUALA LUMPUR: Pengarah Eksekutif Pusat Penyelidikan dan Pembangunan PAS Dr. Dzulkefly Ahmad menggesa agar kerajaan meningkatkan terlebih dahulu pendapatan rakyat dan bukannya cuba mengenakan cukai barang dan perkhidmatan (GST).

Katanya lagi, selain isu meningkatkan pendapatan rakyat, kerajaan juga perlu mengatasi ketirisan perbelanjaan terutama dalam soal pemberian tender secara terus dan juga amalan kronisme.

"Saya nak ingatkan kerajaan perlu melaksanakan banyak perkara sebelum GST dilaksanakan terutamanya melibatkan pendapatan rakyat dan juga soal ketirisan dalam perbelanjaan kerajaan khususnya pemberian tender terbuka.

"Kalau ini tidak dilaksanakan terlebih dahulu, kita akan melihat satu kesan yang amat teruk terutamanya melibatkan rakyat," katanya ketika ditemui pada program rumah terbuka Harakah.

Beliau berkata demikian sebagai mengulas spekulasi bahawa GST 4 peratus akan diperkenalkan dalam Belanjawan 2014 yang akan diumumkan kerajaan Oktober ini.

Menurutnya lagi, dalam keadaan kedudukan ekonomi yang agak suram serta pendapatan rakyat yang tidak meningkat adalah tidak wajar GST dilaksanakan.

"Keadaan ekonomi yang agak suram serta kadar inflasi adalah tidak bertanggungjawab jika kerajaan ingin meningkatkan pendapatan mereka dengan mengambilnya dari rakyat.

"Kerajaan perlu sedar apa yang perlu mereka lakukan terlebih dahulu, corak perbelanjaan kerajaan perlu diperbaiki bukannya mengenakan cukai GST keatas rakyat," katanya.

Wednesday, September 18, 2013

Govt on target to reduce budget deficit

Posted on September 17, 2013, Tuesday

KUCHING: Although there are doubts that the government will be able to achieve its budget deficit target for 2013, owing to its generous handouts to ease people’s financial burden in the first half (1H) 2013 and the early salary increment for civil servants in July, the government indicated that it is confident of achieving the target and reiterated its commitment to bring down its budget deficit gradually to a more manageable level.

As it stands, the government is estimated to have spent RM3.9 billion on the various cash assistance programmes in 2013, up from RM3 billion in 2012. The salary increment, together with the streamlining of the salary scales for armed forces, is expected to cost the government an additional spending of RM2 billion.

Nonetheless, the government said that it is on track to narrow its budget deficit to four per cent of gross domestic product (GDP) or RM40 billion, from a budget deficit of 4.5 per cent of GDP or RM42 billion in 2012 noted RHB Research Institute Sdn Bhd (RHB Research).

“Thus far, the government had two years of good track record in achieving the deficit targets it set in 2011 to 2012. This was made possible on the back of better-than-expected collections from corporate income tax and oil revenue as well as a reduction in its planned gross development expenditure by around RM2.9 billion each in 2011 and 2012. The former was aided by tax audits and investigations to reduce tax evasion,” stated the research house.

“We also believe the government will be able to achieve its target of a budget deficit of four per cent of GDP for 2013. This is reflected in an unexpected sharp drop in gross development expenditure of the government by 33.5 per cent year on year (y-o-y) in the second quarter (2Q), suggesting that the government had temporary suspended its development spending and used the money to part finance the handouts so that it will not worsen its fiscal position significantly.”

The move, though, was at the expense of growth and economic growth in the 2Q was affected somewhat. Also, RHB Research understood that the government’s income tax collection will likely surprise again on the upside, as it enhances its corporate income tax collections.

In addition, the government cut its subsidy and raised fuel prices on September 3 that could save the government RM1.1 billion in 2013 and RM3.3 billion annually. Furthermore, the government indicated that it is targeting to reduce its budget deficit to 3.5 per cent of GDP in 2014 and to three per cent of GDP in 2015.

It has set a target to achieve a balanced budget by 2020.

Apart from enhancing its revenue through better tax management, the government will likely broaden its tax-base through the implementation of Goods & Services Tax (GST), which the government indicated recently that the GST is ‘a must’ and ‘not an option’.

While the government officials are ready to implement the GST, a strong political will is still needed for the government to implement it.

On the expenditure side, the government will likely reinforce measures implemented earlier to rein in its discretionary spending and it has signalled that it will likely reschedule big projects with high import content and low multiplier impact on the economy but will continue those with low import content and high impact multiplier on the economy to prevent a knee-jerk impact on economic growth.

“Meanwhile, we believe more could be done by scrutinising transfer make to statutory bodies and funds, which account for a relatively large portion of the government’s operating expenditure,” the research house stated.


Majority of Malaysian businesses not GST-ready


Wednesday, 18 September 2013 admin-s


(The Sun Daily) - FMM said local businesses, especially the small and medium enterprises (SMEs), are still adjusting to higher costs of production following the introduction of the minimum wage, the minimum retirement age for private sector employees, increased Employees Provident Fund contributions beyond 55 years and rising costs of transport, including port charges.

As the push for the implementation of the much-awaited goods and services tax (GST) gathers pace, it is found that as low as 5% of Malaysian businesses are prepared for the consumption tax.

According to the Federation of Malaysian Manufacturers (FMM), local manufacturers are not preparing themselves for GST as the government is still evaluating the pros and cons and readiness of the population to accept the new tax regime.

"We understand that a number of companies do not have any allocation in their annual budget to prepare for the GST," FMM told SunBiz.

A survey by FMM in April 2012 to assess the readiness of businesses in implementing GST showed that over 60% of businesses that responded were not ready for GST. The remaining 40% indicated that they have made some preparations, such as attending seminars and training to familiarise themselves with the GST scheme.

However, the FMM survey noted that multinational corporations would have the least problems adopting GST as they can leverage on the expertise from their global network of offices.

FMM said local businesses, especially the small and medium enterprises (SMEs), are still adjusting to higher costs of production following the introduction of the minimum wage, the minimum retirement age for private sector employees, increased Employees Provident Fund contributions beyond 55 years and rising costs of transport, including port charges.

The federation is of the view that the GST implementation should be deferred as it imposes heavy tax administration burden on industries, in particular the SMEs.

Deloitte Malaysia country GST leader Tan Eng Yew (pix) told SunBiz most businesses are undecided whether to embark on any GST readiness exercise pending affirmative announcement by the government.

Tan observed that less than 5% of the businesses have started getting themselves ready.

He said GST preparation has wide-ranging implications requiring the involvement of people, processes and technology as all these components would be critical for businesses to be GST-ready.

Tan said top of the wish list of businesses is to allow a deduction of all GST implementation cost. Smaller businesses are also hoping that the government will provide free software to assist them to be GST-compliant.

What would be the appropriate GST rate to begin with?

Tan believes it should be 6% to justify a tax system revamp of this magnitude to replace the existing narrow-based service tax of 6% and sales tax of generally 10%.

When it was mooted in 2004, he said, the proposed GST rate was 4% but based on the Performance Management & Delivery Unit's simulation at 5%, it may generate additional revenue of up to RM8 billion.

"We anticipate the introduction of GST will be followed by a reduction in corporate and individual income tax rates, which would make our tax structure more competitive regionally," said Tan.

He added that export-oriented businesses will benefit tremendously since the GST system zero rates all exports of goods and services, thereby enhancing price competitiveness.

For the government, the wider base of GST ensures a fairer tax system.

Meanwhile, FMM said GST will not only add to the tax burden but will also lead to a manifold increase in the volume of administrative work.

"We do not see GST benefiting businesses in the manufacturing sector. We acknowledge that the government has to take steps to reduce the budget deficit. However, introducing GST to deal with the persistent budget deficit may not be the only way forward," it said.

"We are of the view that reducing wastages or leakages in government expenditure, ensuring better value for every ringgit spent and improving efficiency in utilising public funds to reduce the current deficit should be given priority over the introduction of GST, which would hurt the economy, especially given the weak external environment," it added.

The federation said, instead, the government must ensure that the export sector remains vibrant and competitive given the intense competition in global and regional markets.

It added that all forms of help should be given to Malaysian exporters and SMEs to achieve the required cost and productivity efficiency.

GST will enable celcos to pass on prepaid revenue tax


Published: Tuesday September 17, 2013 MYT 12:00:00 AM 
Updated: Tuesday September 17, 2013 MYT 7:10:27 AM

PETALING JAYA: The likely introduction of the goods and services tax (GST) will be positive for mobile operators, as they would be able to pass on the similar tax or sales tax on prepaid revenue that they have been absorbing for customers all along.

Analysts covering the industry said in recent reports that the GST would be bottomline-positive for the three main telcos in the country – Axiata Group Bhd, Maxis Bhd and DiGi.Com Bhd.

CIMB Research analyst Kelvin Goh said in a report last week that DiGi would stand to benefit the most from a GST imposition on consumers, followed by Maxis and Axiata, via Celcom.

“Prepaid revenue makes up 71% of DiGi’s total revenue versus an estimated 55% for Maxis and 58% for Celcom. The telcos currently book only 94% of prepaid revenues as they absorb the 6% sales tax.

Prepaid users may cut back on usage when the GST is introduced, as they are generally price-sensitive and have tighter budgets,” Goh added.

Goh said DiGi’s financial year 2015 (FY15) core net profit could be lifted by 6% versus 4% for Maxis and about 3% for Axiata should telcos recover only half the tax since some consumers would reduce their spending.

“We estimate a 4.6% or 21 sen rise in our target price for DiGi and a 2.9% or 21 sen increase for Maxis. Axiata’s sum-of-parts-based target price would rise by 2.9% or 20 sen. We have not built this into our forecasts,” he added.

Hong Leong Investment Bank Research analyst Tan J. Young said the telcos could benefit in terms of greater cost savings. He also noted that DiGi would be the biggest benefitor.

“Based on our estimation using second-quarter 2013 operating data, DiGi would possibly enjoy the most with 13.6% in earnings uplift (based on a FY15 estimated profit after tax), followed by Maxis and Axiata with 7.8% and 6%, respectively, provided competition and usage remain status quo,” he said.

Despite the potential lower usage due to the pass-through in taxes to consumers, Tan noted that telcos may also use the same opportunity to intensify competition through the introduction of new packages with extra airtime or download quota to prepaid users, which may also neutralise part of the gains from these tax savings.

Both research houses have rated the sector “neutral”.

Goods & services tax – it's on our doorstep


Posted on 17 September 2013 - 11:20am
Last updated on 17 September 2013 - 11:29am
COMMENT
By SM Thanneermalai


THE goods and services tax (GST) has come up for discussion many times over the past decade and each time the political considerations have outweighed the need to balance our government books, which resulted in Malaysia experiencing budget deficits since 1999.

In simple terms the budget deficit means that the government spends more money than it receives.

But this state of affairs cannot carry on forever. Time has come for the government to come up with fiscal reforms to address this issue; otherwise it will impact our long term future.

Effects are already beginning to be felt with the negative outlook of the country rating (this impacts the cost of borrowing by our corporates and the sovereign borrowings) recently by Fitch Ratings agency.

And, indirectly, one of the reasons for the recent weakening of the ringgit against the US dollar could also be attributed partly to the ongoing deficit saga.

Therefore I believe that this time around the signals coming out of authorities are very strong and so far we have the Ministry of Finance secretary-general Tan Sri Mohd Irwan Serigar Abdullah saying that "GST is a must, not an option " and on Aug 29, 2013, he also said that the Treasury advised the prime minister to include GST in his Budget 2014 speech next month.

The government appears to have commenced the fiscal reform process with the 20 sen increase in the petrol and diesel prices on Sept 3, 2013 together with the announcement that it plans to increase the BR1M payment from RM500 to RM1,200 to alleviate the suffering the impact of rising prices on the middle and lower income sections of our society.

If GST is introduced then this will have to be part of a holistic package of fiscal reforms to address the budget deficit issue. The rationalisation measures that could be introduced could include the reduction of subsidies towards electricity and perhaps others too.

In order to cushion the impact, a reduction in personal and corporate taxes is expected to follow. If GST is introduced, personal tax and corporate tax rates could be reduced by possibly 3% and perhaps up to 5 % over a number of years.

Other measures will also be simultaneously introduced to tackle the profiteering by unscrupulous businesses through proper enforcement of the Price Control and Anti-Profiteering Act 2010.

GST is a more efficient tax compared to the sales and service tax it will replace. The latter two taxes are single stage taxes and are not taxes on the value added. In a value added tax or GST tax regime, although the tax is collected throughout the supply chain, it is only the final customer who pays for it. This is because businesses may recover the tax at every stage of the value chain of a taxable product or service until it reaches the final consumer.

However, one cannot deny that the introduction of GST despite the zero rating of essential products and services such as rice, salt and vegetables and essential healthcare services will result in a temporary inflation but past experience in other countries has been that such increases taper in one to two years.

I anticipate the rate to be set at no lower than 4%, but could be as high as 6% if one uses the current service tax rate as a benchmark.

Finally, this is a tax that can only be introduced in my opinion no earlier than 15 months after its announcement and that means the earliest date on implementation could be Jan 1, 2015, thus allowing businesses to prepare their systems to account for this tax to the government.

The government can help the business community by setting a clear policy on the appointed date to facilitate preparations to implement the tax.

A word of caution is that without the introduction GST, the government will still have to deal with the budget deficit issue and this is can only be done through reduction in government expenditure or through borrowings or through tougher enforcement of the current tax laws by the Inland Revenue Board and the Royal Malaysian Customs and minimising leakages from the system.

SM Thanneermalai is president of the Chartered Tax institute of Taxation of Malaysia and a senior executive director of PwC.

Majority of Malaysian businesses not GST-ready


Posted on 17 September 2013 - 11:23am
Premalatha Jayaraman sunbiz@thesundaily.com

Deloitte Malaysia country GST leader Tan Eng Yew

PETALING JAYA (Sept 17, 2013): As the push for the implementation of the much-awaited goods and services tax (GST) gathers pace, it is found that as low as 5% of Malaysian businesses are prepared for the consumption tax.

According to the Federation of Malaysian Manufacturers (FMM), local manufacturers are not preparing themselves for GST as the government is still evaluating the pros and cons and readiness of the population to accept the new tax regime.

"We understand that a number of companies do not have any allocation in their annual budget to prepare for the GST," FMM told SunBiz.

A survey by FMM in April 2012 to assess the readiness of businesses in implementing GST showed that over 60% of businesses that responded were not ready for GST. The remaining 40% indicated that they have made some preparations, such as attending seminars and training to familiarise themselves with the GST scheme.

However, the FMM survey noted that multinational corporations would have the least problems adopting GST as they can leverage on the expertise from their global network of offices.

FMM said local businesses, especially the small and medium enterprises (SMEs), are still adjusting to higher costs of production following the introduction of the minimum wage, the minimum retirement age for private sector employees, increased Employees Provident Fund contributions beyond 55 years and rising costs of transport, including port charges.

The federation is of the view that the GST implementation should be deferred as it imposes heavy tax administration burden on industries, in particular the SMEs.

Deloitte Malaysia country GST leader Tan Eng Yew (pix) told SunBiz most businesses are undecided whether to embark on any GST readiness exercise pending affirmative announcement by the government.

Tan observed that less than 5% of the businesses have started getting themselves ready.

He said GST preparation has wide-ranging implications requiring the involvement of people, processes and technology as all these components would be critical for businesses to be GST-ready.

Tan said top of the wish list of businesses is to allow a deduction of all GST implementation cost. Smaller businesses are also hoping that the government will provide free software to assist them to be GST-compliant.

What would be the appropriate GST rate to begin with?

Tan believes it should be 6% to justify a tax system revamp of this magnitude to replace the existing narrow-based service tax of 6% and sales tax of generally 10%.

When it was mooted in 2004, he said, the proposed GST rate was 4% but based on the Performance Management & Delivery Unit's simulation at 5%, it may generate additional revenue of up to RM8 billion.

"We anticipate the introduction of GST will be followed by a reduction in corporate and individual income tax rates, which would make our tax structure more competitive regionally," said Tan.

He added that export-oriented businesses will benefit tremendously since the GST system zero rates all exports of goods and services, thereby enhancing price competitiveness.

For the government, the wider base of GST ensures a fairer tax system.

Meanwhile, FMM said GST will not only add to the tax burden but will also lead to a manifold increase in the volume of administrative work.

"We do not see GST benefiting businesses in the manufacturing sector. We acknowledge that the government has to take steps to reduce the budget deficit. However, introducing GST to deal with the persistent budget deficit may not be the only way forward," it said.

"We are of the view that reducing wastages or leakages in government expenditure, ensuring better value for every ringgit spent and improving efficiency in utilising public funds to reduce the current deficit should be given priority over the introduction of GST, which would hurt the economy, especially given the weak external environment," it added.

The federation said, instead, the government must ensure that the export sector remains vibrant and competitive given the intense competition in global and regional markets.

It added that all forms of help should be given to Malaysian exporters and SMEs to achieve the required cost and productivity efficiency.

Bantu miliki rumah


Publication: HM
Date of publication: Sep 14, 2013
Section heading: Main Section
Page number: 070
Byline / Author: Oleh Sofyan Rizal Ishak

Petaling Jaya: Syarikat pemaju hartanah menjangkakan Bajet 2014 akan membentangkan dasar lebih ketat bagi sektor hartanah bertujuan membendung spekulasi dan membantu golongan berpendapatan rendah untuk memiliki rumah mampu milik.

Pengurus Negara PropertyGuru Malaysia Gerard Kho berkata, bajet terbabit bukan perlu bersifat proaktif semata-mata, malah bermatlamat merangka dasar lebih konsisten bagi menarik keyakinan pelabur tempatan dan asing serta menawarkan prospek pelaburan jangka panjang dan berisiko rendah.

"Kerajaan perlu mempertimbangkan pemberian insentif tambahan berupa pengecualian duti setem atau insentif bonus bagi membantu pembeli baharu di samping pengecualian cukai pendapatan hasil sewa untuk tiga tahun pertama bagi mendorong pembeli mengekalkan aset dalam tempoh lama," katanya.

Sehubungan itu juga, Pengarah Urusan Andaman Property Management Sdn Bhd, Datuk Seri Vincent Tiew berkata, dasar terbabit diharap lebih berpandangan jauh dan dapat dijelaskan dengan baik untuk menggalakkan dan mengukuhkan perkembangan industri hartanah negara.

"Saya menjangkakan terdapat perubahan drastik kepada Cukai Keuntungan Hartanah (RGPT), namun saya lihat ia tidak begitu memberi kesan kepada keuntungan syarikat, namun aspek pengecualian duti setem perlu diberi tumpuan utama dalam sektor ini," katanya pada forum pemaju hartanah PropertyGuru di sini, semalam.

Acara tertutup itu menyaksikan beberapa syarikat pemaju hartanah berkongsi pandangan mengenai beberapa perkara dalam industri hartanah termasuk harapan bagi Bajet 2014, pelaksanaan cukai barangan dan perkhidmatan (GST), RGPT, kenaikan hartanah, kos pembinaan dan sebagainya.

Sebanyak tiga syarikat pemaju tempatan mengambil bahagian dalam acara anjuran PropertyGuru Malaysia iaitu Austin Height Sdn Bhd (Austin Height), Kumpulan Binastra (Binastra), Andaman Property Management Sdn Bhd (Andaman) dan Perbadanan Hartanah Malaysia (MPI).

Vincent berkata, pengecualian duti setem membantu rakyat untuk memiliki hartanah masing-masing, namun ia memerlukan pelaksanaan mekanisme lebih berkesan tanpa memberi impak negatif kepada semua pihak yang terbabit dalam industri itu.

Menurutnya, kerajaan diharap dapat mengkaji semula pengecualian duti setem terbabit kerana ia dapat mengurangkan beban dihadapi pembeli rumah yang berminat membeli hartanah kategori pertengahan hingga mewah sekali gus mewujudkan permintaan terhadap perumahan daripada unit kediaman segmen berkenaan.

"Selain pengecualian duti setem, inisiatif kerajaan dalam menawarkan rumah kediaman mampu milik melalui Projek Perumahan Rakyat 1 Malaysia (PR1MA) amatlah di alu-alukan, ia memerlukan kerjasama daripada pihak kerajaan negeri dan institusi perbankan yang dilihat tidak begitu membantu dalam pelaksanaan inisiatif terbabit," katanya.

Cellcos to benefit from GST implementation

by Sharon Kong, sharonkong@theborneopost.com. Posted on September 14, 2013, Saturday

KUCHING: Cell phone companies (cellcos) are set to benefit from the introduction of the goods and services tax (GST) as observed by analysts.

According to the research arm of CIMB Investment Bank Bhd (CIMB Research), the likely introduction of GST should be positive for the mobile carriers as they would no longer have to absorb the six per cent sales tax for prepaid users.

“Postpaid users already bear this tax. The operators attempted to pass on the sales tax in 2011 but could not get the government’s blessing as it was a sensitive issue before the general election,” Kelvin Goh of CIMB Research explained.

This is despite the government not having any say on the telecom companies (telcos) since the tax is imposed on consumers.

The research arm opined that DiGi.Com Bhd (DiGi) stands to benefit the most from a GST, followed by Maxis Communications Bhd (Maxis) and Axiata Group Bhd (Axiata) through Celcom.

It added that prepaid revenue makes up 71 per cent of DiGi’s total revenue, compared to an estimated 55 per cent at Maxis and 58 per cent of Celcom.

However, the research arm noted that prepaid users may cut back on usage when GST is introduced as they are generally price sensitive and have tighter budgets.

Assuming that the telcos are able to recover only half the tax since some consumers would reduce their spending, DiGi’s financial year 2015 (FY15) core net profit could be lifted by six per cent versus four per cent for Maxis and about three per cent for Axiata.

“As such, we estimate a 4.6 per cent or RM0.21 rise in our discounted cash flow-based target price for DiGi and a 2.9 per cent or RM0.21 increase for Maxis, while Axiata’s sum of parts-based target price would rise by 2.9 per cent or RM0.20,” Goh reiterated.

As for the research arm of Hong Leong Investment Bank Bhd (HLIB Research), it generally welcomed this development as this will benefit cellcos in terms of cost savings.

As with CIMB Research, it also expects DiGi to benefit the most if this materialises considering that it has the highest proportion (84 per cent) of prepaid users to total subscriber base, compared to Maxis (74.8 per cent) and Celcom (77.5 per cent).

“Based on our estimation using the second quarter of 2013 (2Q13) operating data, DiGi will possibly enjoy the most with 13.6 per cent in earning uplift (based on FY15 estimates profit after tax), followed by Maxis and Axiata with 7.8 per cent and six per cent respectively, provided competition and usage remain status quo,” analyst Tan J Young of HLIB Research projected.

However, HLIB Research also highlighted the risk of lower usage (MOU) from prepaid subscribers after the pass through is enforced considering the highly price sensitive nature of this market segment, especially migrants who are the major contributor of the prepaid segment.

Hence, this may dwarf its bullish estimation above in the short term as usage declines.

“We also do not discount that cellcos may use this opportunity to intensify competition by introducing new packages to compensate the higher cost of service with extra air time or download quota to prepaid subscribers which may also neutralise part of the gain from the tax savings,” Tan added.

Overall, both HLIB Research and CIMB Research maintained their ‘neutral’ ratings on the sector, given the fact that GST is only expected to be introduced in 2015.


All eyes on Budget 2014


Published: Saturday September 14, 2013 MYT 12:00:00 AM 
Updated: Saturday September 14, 2013 MYT 9:37:04 AM


Wan Zuhairi Wan Yaakub

Budget 2014 will be keenly watched for a number of reasons. The biggest is to see just what the Government will announce to improve its fiscal position in light of a rating outlook downgrade by Fitch Ratings. That warning led to a cut in fuel subsidies and other measures and the Government has explained why that had been done. StarBizWeek editor Jagdev Singh Sidhu met with Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar for a greater understanding on why cuts were needed and the rationale behind policy changes that have been made.

Q: The Fitch warning certainly appears to kick things off. From the Government’s standpoint, how do you approach this issue?

A: First of all we need to be clear about the challenges we are facing. We are in a situation where growth is slower than what we had expected. Last year when we prepared the budget for 2013 we expected the external environment to be very conducive, manageable growth in China, didn’t expect commodity prices to come down so hard and certainly did not expect the kind of reaction we are facing now in the reversal of the quantitative easing by the Fed.

For the first quarter of this year, the GDP was 4.1% and 4.3% in the second quarter. Although it was better than the first quarter it was below what we had forecast and that had necessitated the revision by the central bank to 4.5% to 5%.

Secondly, it’s the way we manage our fiscal position. Last year we had a fiscal deficit of 4.7% of GDP and we made the commitment to reduce the deficit to 4% this year and to 3% by 2015.

In an environment where GDP is lower than what was anticipated, the need to manage our spending becomes more urgent.

That’s why we had to accelerate whatever rationalisation we had to have in terms of spending on subsidies and broadening the tax base and so on.

The third challenge that we have is in respect of the Government’s debt position. Last year we were at 53.3% and we are limiting it to the 55% debt ceiling that we have set for ourselves.

It’s in the context of trying to contain the deficit and the economy not growing at the rate we expected. There is a lower denominator and therefore there is a need to conserve more.

The fourth issue is about the narrowing current account surplus. We had a surplus of RM8.7bil in the first quarter and in the second quarter it was RM2.6bil.

We need to make sure that we don’t get into a deficit situation. We must understand that the reason for the contraction in the current account surplus is from the lower exports of our commodities. CPO exports in the first 6 months of this year actually came down by about 20% compared with last year.

At the same time we have imports of lumpy items, among others imports of vessels and aircraft, not only by Malaysia Airlines and AirAsia but also by Malindo.

That contributed to the narrowing of the trade surplus. On top of that, in arriving in the balance of payments of the current account you also have capital flows.

While FDIs continue to be good, Malaysian companies are investing abroad in recent times such as Petronas, Maybank, Axiata and CIMB.

That contributed to the net outflow, and then there are investments in properties by both Malaysian funds and companies in places like London, Singapore, Australia and so on.

When you add all that, it contributed in the narrowing of the current account surplus. We have to therefore track this carefully to make sure we do not get into a negative of deficit situation.

Is it an issue of managing the perception and then tackling the problem?

Before any decision will be made, we have to be very clear what the diagnosis is. What is the cause and effect and be clear about the possible measures we can undertake. Then we have to prepare a few steps ahead to make sure we are able to deal with those issues.

That’s why no decision is made on the basis of impulse.

Whatever issues faced by the rating agencies were not new. We were already aware of the situation and before we made any move, we needed to make sure we considered all aspects. That’s why it took us a while to make the decision to rationalise subsidies.

The subsidy rationalisation represents the first step. Why fuel and what more can we expect?

If you look at our spending on petrol subsidies, in 2012, we spent some RM24bil. That’s a lot of money as a percentage of income that we have. This year we are looking at RM209bil. That is 11.5% on just a single item - subsidy on fuel.

I think that’s not sustainable. When fuel is subsidised to that extent, it not only distorts the market but it’s not making the subsidy targeted. That means those who do not deserve the subsidy will enjoy them and because of the distortions in the market, there are issues of leakages in terms of smuggling and usage of fuel by people who are not actually meant to get them.

Therefore, you need to start somewhere and we believe that doing it now is timely.

When you want to reduce subsidy with the consequential effect of increasing the price of fuel, no time is a good time. When you do that, there is always a negative reaction. From our perspective, it is actually timely on a few counts.

At the current inflation level of 2%, it is at a very low level and therefore the effect of the reduction of the fuel subsidy should be able to be contained. In this respect, we anticipate that the impact will be a 0.3% increase in the CPI both direct and indirect increase. That’s for 2013. Secondly, in terms of the need to benefit from the savings.

The RM24bil per annum, in the context of the petrol and diesel subsidy we are trying to save, by cutting the subsidy by 20 sen per litre we are able to save RM1.1bil for 2013. On an annualised basis, that’s RM3.3bil.

If you were to delay the implementation, there will be less savings we will get from this current fiscal year. Under the normal circumstances, it will translate to about RM300mil of savings per month.

In the context of a narrowing GDP, that will help.

In the need of addressing this issue in terms of the expectations of rating agencies wanting a clear resolve from the Government, this is timely too.

We do not expect any revision of the rating agencies’ view just purely based on a single event but we are saying is this is actually the start of a number of measures that will be underaken. The bulk of which will be announced in the Budget 2014.

In the past when subsidies are cut, it was later reinstated. Is there a resolve to permanently cut the subsidies from here on?

I think there is that resolve. Looking at the subsidy of RM24bil per annum, that’s not sustainable for any country. Therefore, reducing it is the right way to go while addressing the needs of the people.

Apart from subsidies and sequencing the projects, some say the Government must have a hard look at how it spends its money such as national service. When you look at the cost-benefit analysis, is it worthwhile to have certain projects or programmes?

Efforts to optimise the spending of the Government will have to continue. There are many areas where that can be looked at and for each programme we undertake we have to look at the cost-benefit.

Where we think the benefits are not there, it is a matter of reviewing it and making sure we reduce the cost to make sure the benefits outweigh the cost, or we come up with alternative programmes that can be more effective to achieve our targets or original intention in undertaking a certain programme in itself.

That will have to be looked at in Budget 2014 in terms of the annual operating expenditure and the 5-year plan that we have.

When you start looking at reforming expenditure, is it just subsidies or how the Government spends its money?

Obviously, priorities will be on big ticket items. Having said that we believe in the need on optimising spending overall whether the amount is big or small.

We must make sure we spend money based on what is needed and taking into account the cost-benefit. In terms of procurement, it’s the priority to get the right product at the right price and at the right time in terms of delivery of the items.

Sometimes when you go through the process of normal tendering, you must also be able to test whether the actual price is actually reasonable or not.

And that’s when you start to benchmark against the price of what’s available out there in the market. This will be part of the vigorous improvements we will continue to make.

In this respect, it will be for all ministries although driven by the finance ministry. We at EPU will lend full support in terms of improving the overall effectiveness of procurement.

There is the pilot programme - outcome based budgeting. Can you explain how this is going to change how the Government will spend its money?

Typically in the past when we come up with a budget, it’s based on what’s required by each ministry, look at our revenue and then start to allocate. Once allocated, one is expected to spend and the amount not spent will get deleted and (the process) starts afresh the next year.

In this context, there will be a lot more focus on the outcome, notwithstanding certain projects that have been budgeted. Along the way if you find the needs are not there or there is a need to refine them further, there will be the continuous improvement in the process.

A lot of people are saying that the GST will be announced on Budget day. Is there a need to have GST and if so why?

Whether or not it will be in Budget 2014 we will leave that to the Prime Minister who is also the finance minister.

I’m speaking broadly as a former banker. When you look at the experience of other countries in how they manage their finances, one of the most effective ways in ensuring sustainable revenue and growth is to put in place an indirect taxation system which will cover as much taxpayers as possible. For income tax, the number of taxpayers is very limited and (they represent) a small percentage of the total population. In implementing a tax such as GST, it will be very broad-based.

And this is very much consumption driven. In that context, it will enable the tax base to broaden. That has been the experience of most countries and in the case of Malaysia, it shouldn’t be any different. When you look at the current base of income tax, it is pretty small compared with other revenue. So I think there is a need for us to look at broadening our tax base as well.