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Tuesday, January 7, 2014

Ahmad Maslan: GST can contribute additional 0.3 pct to GDP

PUTRAJAYA: Deputy Minister of Finance Datuk Ahmad Maslan says the goods and services tax (GST) to be enforced on April 1, 2015 can contribute an additional 0.3 per cent to the gross domestic product (GDP) and 0.5 per cent to exports in 2015 and 2016.

He said the higher exports are derived from exports of goods that are not imposed GST, "rendering the price of our exports to be more competitive and are sellable in foreign countries."

"The transparent and fair implementation of the GST will also help curb "black economy" activities" to a certain percentage," he told a press conference today.

Ahmad Maslan said developing countries like Malaysia have a high percentage of "black money" or high tax avoidance activities at around 30 per cent from the overall GDP as compared with advanced nations -- about 10 to 15 per cent only.

In tandem with serious efforts to curb black money activities, the deputy minister said the initiative would help growth of the GDP and increase the country's revenue, raking in long-term benefits to be nejoyed by the nation through implementation of the GST.

Ahmad also said the government was not denying that there would be a temporary impact on consumer goods in the early stages of the GST implementation.

Nevertheless, between several months and a year, prices of consumer goods would stabilise as the GST would reduce the cost of doing business, he said.

"Consumers will not feel the "compounding" and "cascading" effects as felt by them when the GST was implemented which has caused them to bear a heavy tax burden," he said.

Ahmad said the government is projected to receive RM3.7 billion in 2015 and RM9.09 billion in 2016 in revenue from the GST implementation.

Ahmad also said the Finance Ministry would continue to hold the seminar entitled "Empowering the National Economy" aimed at explaining to the people the rationale of implementing the GST in every state.

The seminar started last month and would end in Kuala Lumpur on Feb 2, he said.

He said the seminar would also explain to the people on current issues in the country and the recently announced 11 cost-cutting measures by the government as part of the austerity drive to trim down expenditures in the public sector.

About 2,000 to 3,000 attendees from the five main groups -- government officers, community leaders, non-governmental organisations, youth and undergraduates, private sector officials and government-linked companies -- are to attend the seminar in every state.--BERNAMA

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