NOT AN EASY TASK: A woman holding her child buys tomatoes at a market. The implementation of the GST will not be an easy task for the government as it involves both downstream and upstream players in the commercial, retail and manufacturing sectors, not forgetting the general public. — Reuters photo
Tan Eng Yew
KUCHING: The situation surrounding the Goods and Services Tax (GST) is a precarious one. Since its first mention some three years ago, ministers have delayed its implementation to further study its impact towards the society.
GST, a multi-stage consumption tax, is based on consumption rather than earnings and can be charged on virtually all supplies of goods and services. The proposed implementation will replace the current sales tax and services tax.
Many tax specialists believe it was just a matter of time before the GST takes place. Tan Eng Yew, executive director of KPMG Malaysia supported this opinion.
“The government has consistently reiterated the commitment to implement the GST in Malaysia. It is just a matter of timing,” affirmed Tan.
“However, being a major tax reform that will affect a broad spectrum of businesses and the consuming public, understandably the government will wish to ensure the general acceptance of this new regime and the readiness of the government machinery before making further announcements,” he added.
“These issues are being addressed at the moment. In terms of the rate of the GST, the indication so far has been that it would not be burdensome even though no specific announcement has been made.”
Should this be implemented, specialists believed the GST could give rise to new ways of operating businesses, presenting a rich scope for business efficiency.
Currently, Malaysia’s sales tax is imposed on taxable goods manufactured locally or imported, following the Sales Tax Act 1942.
On a broad scope, sales tax is charged as follow: five per cent for fruits, certain food items, timber and building materials, liquor and alcoholic drinks, cigarettes and tobacco products. All other goods not specifically exempted are taxed at 10 per cent.
Meanwhile, the services tax is a consumption-tax levied and charged on any taxable service provided by any taxable person. The current rate of service tax is six per cent of the price, charge or premium of the taxable service.
Minister in the Prime Minister’s Department Datuk Seri Idris Jala previously said the government would be implementing the GST but not just yet as it wanted to ensure that the public fully understood the move and was supportive of it.
Its implementation would not be an easy task for the government as it involves both downstream and upstream players in the commercial, retail and manufacturing sectors, not forgetting the general public.
Also, there was fear that prices of goods and services would rise once the GST was put in place.
Read more: http://www.theborneopost.com/2012/02/08/gst-to-be-or-not-to-be/#ixzz2WBbMlZYL
