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Thursday, January 2, 2014

'Govt needs to come up with GST law quickly'

KUALA LUMPUR – The government needs to come up with the Goods and Services Tax (GST) law quickly and not wait until its implementation on April 1, 2015.

Crowe Horwath Malaysia Managing Partner Poon Yew Hoe said although the GST is a good system, there were lots of negative comments in the market.

By having all the laws in place earlier, it would give the businesses certainty and confidence in its implementation. 

"Businesses don’t like uncertainty. Whether it is GST bills, regulation or industry guides, we would like it to come out early so we can study the details.

"If there are problems, grey areas or uncertainties, we can get back to them for clarity," he told Bernama in an interview.

He said once the laws were clear, businesses would be innovative enough to solve their own business problems.

On concern that the GST implementation would result in price increase, Poon said if the businesses control their cost well and not overcharged, there should not be a big increase in prices.

“According to our calculations, we found out some goods prices would decrease and some would increase. Common ones, like the property sector that is partly affected by the construction companies, theoretically there should not be any significant price increase,” he said.

This is because the construction companies buy materials from manufacturers, who previously paid sales and services tax for their goods, is now paying less with the GST. 

This reduction in cost is passed down the chain to the developers, he said.

Meanwhile, Crowe Horwath Australia GST Partner, Jonathan Doy said after Australia removed a number of taxes and replaced it with GST, there was inflation of around 2.0 to 3.0 per cent with modest consumer price index (CPI) increase.

“To monitor the price changes, we had a consumer pricing watchdog organisation called the Australian Competition and Consumer Commission.

“The body did studies on critical industry using economists and publish guidelines for industry in terms of where they expect price to increase, decrease and by how much,” he said.

Doy said the commission monitored prices movement very heavily.

“Changes did occur but very few instances of price changes outside the range expected,” he said.

Doy said from his observation, the Malaysian customs is well ahead and doing excellent job in preparing for the GST.

“Fundamental lesson is to start preparing early. The sooner you start, you can avoid bottleneck situation that would happen towards implementation where resources are much more scarce and costly,” he said.

Doy added the government should continue to educate people about the GST and through education, easy and active compliance would be achieved. -- BERNAMA

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