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Wednesday, March 19, 2014

Maslan: GST impact will be minimal

Leven Woon | March 19, 2014

The Deputy Finance Minister tells Parliament there will be just a 1% hike in restaurant food after the GST comes into effect on April 1, 2015

KUALA LUMPUR: Deputy Finance Minister Ahmad Maslan said food and beverage prices in restaurants were expected to go up by just 1% when the Goods and Services tax (GST) is imposed.

He told the Dewan Rakyat that food materials in most restaurants were already subjected to 5% hidden sales tax.

“It is inaccurate to say the cost of dining at a restaurant would be higher. Actually there will be only be a 1% increase,” he said during a question and answer session.

He, however, conceded that more restaurants would be eligible for taxation under the GST scheme because the threshold would be lowered from the current RM3 million annual turnover to RM500,000

“Now only 4,357 restaurants are eligible to collect the 6% sales and services tax, but when GST is implemented, as many as 15,542 restaurants would be taxed,” he said.

At a press conference later, he said the government has allocated RM175 million as subsidy to help Small and Medium Enterprises (SMEs) to purchase GST-compliant accounting software.

He said 55 companies have been appointed to develop the software, and its selling price would vary subject to different specifications.

“The price range is about RM1,000, but some companies can do it cheaper or some maybe more expensive because it is more sophisticated,” he said

The Pontian MP also said the government is expected to collect RM3.87 billion in revenues after GST is imposed from April 1, 2015.

He said gross revenues is estimated at RM23.18 billion, but it has to be deducted with the loss of revenues due to the abolition of sales and services tax (RM14.4 billion), provision of government aid (RM2.49 billion) and the reduction of income tax (RM2.42 billion).

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