Anisah Shukry | March 31, 2014
A fine of RM50,000 to RM500,000 or imprisonment up to seven years, or both, awaits individuals evading the tax.
KUALA LUMPUR: Parliament today tabled the controversial Goods and Services Tax (GST) for its first reading, setting in motion the tax’s eventual implementation amid national criticism that it was allegedly regressive.
“The GST is a broad-based consumption tax based on a value added concept. The GST will replace the sales tax and service tax currently imposed and collected under the Sales Act 1972 and the Service Tax Act 1975,” the Goods and Services Tax Bill 2014 states.
According to the Bill, the tax “shall be charged and levied on (a) any supply of goods and services made in Malaysia, including anything treated as a supply under this Act and (b) any importation of goods into Malaysia.
Although the GST rate had previously been announced as 6%, the Bill does not mention a specific figure. Clause 10 merely states that the Finance Minister shall determine the rate and it will be laid before the Dewan Rakyat during its next meeting.
Similarly, the Finance Minister shall identify the “zero rated supply”, or goods and services not taxed and it will be laid down before the Dewan Rakyat at the next meeting.
Penalties under GST
Under Clause 49, the Customs Director-General may prevent any individual from leaving the country until and unless they have paid their outstanding GST.
Upon receiving a notice from the director-general, the Director of Immigration shall exercise “all measures which may include the removal and retention of any certificate of identity, passport, exit permit or other travel document”.
Meanwhile, any person found guilty of tax evasion for the first time will be liable to a fine between 10 to 20 times the amount of tax, or imprisonment up to five years, or both.
Repeat offenders will be fined an amount between 20 to 40 times the tax, or imprisoned up to seven years, or both.
However, if the amount of tax cannot be ascertained, the individual is liable to be fined between RM50,000 to RM500,000 or imprisoned up to seven years, or both.
Any person found assisting the individual may, upon conviction, be fined between RM2,000 to RM20,000 or imprisoned up to three years, or both.
Clause 88 states that any person who makes an incorrect return by omitting from the return any information; or understates any output tax or overstates any input tax in a return; or gives incorrect information in relation to his own liability for tax will have committed an offence.
Upon conviction, the person is liable to a fine not exceeding RM50,000 or imprisonment of up to three years, or both, and a penalty equal to the amount of tax undercharged.
Under Clause 90, individuals found guilty of “improperly obtaining a refund” would be liable to a fine up to RM50,000 or a prison term up to three years, or both; and a penalty of twice the amount refunded or entitles as a relief.
Anyone found guilty of obstructing GST officers, including failing to “give reasonable facilities or assistance” to the officers, are liable to imprisonment of up to seven years or a fine of RM100,000, or both.
The government wants to implement the GST effective April 1, 2015.