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Friday, March 21, 2014

GST exemptions on many items for low-income group

Published: Thursday March 20, 2014 MYT 12:00:00 AM 
Updated: Thursday March 20, 2014 MYT 7:14:40 AM

GOODS and services for the lower-income group would mostly be exempted from the goods and services tax (GST) when it comes into effect in April next year, Deputy Finance Minister Datuk Ahmad Maslan said.

He added that the Government would also provide several packages to ease the burden of the low and middle-income earners.

These include a one-off additional payment of RM300 under the BR1M programme next year, above what is usually given.

Other packages are a ‘shoppers guide’ on the change of prices and a reduction of personal income tax rate of between 1% an 3% for all groups.

Ahmad said this in response to a supplementary question by Teo Nie Ching (DAP - Kulai), during the debate on the royal address.

He said enforcement would be stepped up to prevent indiscriminate price increases by traders under the Price Control Act and the Anti-Competition Act that were implemented in 2011.

Ahmad said more than 15,500 restaurants would impose the GST on their food and beverages when it comes into effect in April next year.

At the moment, about 4,360 restaurants enforced the sales and service tax, he said.

“The GST would help restructure the Government’s taxation to make it more efficient while strengthening the nation’s fiscal position for the good of the people.

“GST is not a new tax but rather it replaces the current sales and services tax.

“The Government found weaknesses in this (current) tax, such as the double tax effect where consumers have to pay higher prices.

“The GST can overcome the negative effects to consumers and the nation,” he said, adding that the GST would have a positive effect on the economy.

“Basic goods and services such as health, education, toll and housing are exempted from the GST to ensure that the people’s interest were taken into account.”

Later, at a press conference, Ahmad said details of the RM150mil GST software program subsidy for 55 IT companies are being worked out by the Government to prepare small and medium enterprises for the new tax regime.

He said the companies will supply the software program at a subsidised cost to SMEs with an annual turnover below RM500,000.

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