Posted on October 20, 2010, Wednesday
KUCHING: The Goods and Services Tax (GST) is generally not a cost to businesses making taxable supplies as the input tax on direct and indirect goods and services are creditable.
With the implementation of GST, it will help to avoid tax cascading, multiple taxation and transfer pricing bias which are proven to be inefficient over the years of implementation.
“Based on a study, the inflationary pressure is expected to be negative,” said the executive director of PricewaterhouseCoopers Taxation Services Sdn Bhd, Fan Kah Seong.
In comparing the standard GST rate in the region, Fan said that the GST that will be implemented in Malaysia is the lowest in the region.
He said that even though the government had postponed the bill, it has not withdrawn the bill and the GST would remain a long-term policy of the government.
Under the GST bill, business’ sales turnover of more than RM500,000 a year must obtain licences for GST. Companies are advised to apply for the GST licence three months before the GST implementation date to avoid any complications.
As for the types of products that attract GST, Fan noted that most supply of goods and services attract GST unless exempted by the government.
According to the GST bill, the government has outlined zero rate supplies; which are taxable supplies that are subject to zero rate and exempt supplies; which are not subjected to GST but suppliers cannot claim GST incurred on business inputs.
The supplies that have been outlined by the government under the GST bill that qualified for the zero rate and exempt supplies were mostly the necessities of the people.
On another note, he said that GST will also be covering importation, which included payment to foreign service providers.
In giving his personal estimation, Fan said that the possible timeline for the implementation of the GST was in 2013 and it was unlikely that the GST would be implemented in 2011.
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