The Malaysian Reserve | April 30, 2014
By K Vinotharan
KUALA LUMPUR: Small- and medium-scale enterprises (SMEs) will be the most affected by the introduction of the Goods and Services Tax (GST) from April next year due to lack of resources and funds to comply.
A survey of 1,000 companies undertaken by the National ICT Association (Pikom) found that SMEs will see significant impact on their revenue as they are the most in need to customise financial planning, tax filing and invoice billing to comply with GST collection.
Pikom chairman Cheah Kok Hoong said SMEs are now looking for financial support from government agencies and local vendors like banks and technology vendors to help ease the burden to make their organisations GST-ready.
“At this stage, many organisations have found themselves having only allocated a limited budget and possessed inadequate resources and knowledge to properly get themselves ready in facing the far-reaching operational and financial impact of a new tax system on their business,” he said in a statement.
He said in addition, they are also turning to ICT vendors to seek consultation to optimise the existing organisational infrastructures to comply with the new GST system.
The survey also saw that there is a large number of organisations in Malaysia that are still not ready for the implementation of the GST.
Over 70% of local organisations have indicated that their employees need more training to implement the GST system and further manage the impact to business operations.
The survey also shows that as of now, there are less than 25% of organisations that have sent their ICT employees to be properly trained to implement and leverage the new GST system.
Cheah said local ICT organisations are playing an important role to cushion the impact of local businesses trying to deal with the complexity of GST by leveraging on their expertise and track record of GST implementation in other countries.
Cheah said Pikom will host a series of seminars on GST in line with its efforts to educate organisations especially SMEs to gain in-depth insights on the new tax system.
Recently, the Malaysian Retail Chain Association (MRCA) had reported that only 10% of retailers in Malaysia are ready for the implementation of GST.