Nuffnang Add

Thursday, May 8, 2014

Dewan passes GST bill

Publication: NST
Date of publication: May 6, 2014
Section heading: Main Section
Page number: 006
Byline / Author: By Adib Povera

KUALA LUMPUR: THE Goods and Services Tax (GST) Bill 2014 was passed after the third reading at the Dewan Negara last night.

Dewan Negara Deputy Speaker Senator Doris Sophia Brodi announced that the bill was passed at 8.34pm, after it was debated for seven hours by 32 senators, with most voicing support for the implementation of the new taxation system.

Deputy Finance Minister Datuk Ahmad Maslan, during the winding-up for the debate on the bill, said theGST was needed as there were weaknesses in the present taxation system which could hinder the country's growth and stymie efforts to become a high income nation.

The bill seeks the replacement of the present sales and services tax with a rate of up to 16 per cent slashed down to six per cent under the new system.

"We want to improve our taxation system. The mechanism under the GST is more effective and transparent," Ahmad said.

He projected that the country's gross domestic product (GDP) would grow by 0.3 per cent after the GST is enforced. Trading activities would also continue to flourish, creating more business opportunities.

"The introduction of the GST will also close the income gap among the high, middle and low income groups."

He said the Finance Ministry had identified 689 items that will be taxed under the GST, with only 73 items incurring a price increase.

"From the items identified, 48 per cent, or 349 items, will not be affected. Their prices will remain the same after GST.

"Its implementation will also see a drop in price for 287 items taxed under the new taxation system," he said, adding that the ministry was considering whether to include another 255 items to be taxed under the new system.

To avoid unscrupulous traders from taking advantage by hiking the price of goods following the introduction of the new tax, Ahmad Maslan said the government would issue a shopping guide for consumers to protect them from being duped.

He said the shopping guide would be released about three months before the GST comes into force, on April 5 next year, adding that the GST would not be imposed on basic food items and necessities.

Although the consumer price index would go up by eight per cent after the implementation of the GST, he stressed it would be a "one-off" increase because of the transition from the old to the new taxation system.

As seen by the 160 nations which have adopted a form of GST, Ahmad Maslan said inflation would stabilise after the implementation of the new taxation system.

Earlier, when debating the Bill, several senators criticised the opposition for the rally held to protest against the implementation of GST on May 1.

Senator Datuk Megat Zulkarnain Omardin said the opposition feared that Barisan Nasional would gain greater support from the people after the GST was implemented since it was a good taxation system.

Senator Choong Sin Woon said the demonstration was another political ploy by the opposition.

"The opposition condemned the implementation of the GST but they failed to be constructive about it. I have checked social media sites clamouring about anti-GST (measures), but none provide any alternative to the taxation system."

The GST Bill was passed at the Dewan Rakyat after the third reading on April 7.

No comments:

Post a Comment