Authorities agree to request for full recovery of input tax from CSR expenses

Thursday July 12, 2012

By Jack Wong
jackwong@thestar.com.my

KUCHING: The authorities have agreed to Sarawak Timber Association’s (STA) request to treat the expenses incurred by logging companies on corporate social responsibility (CSR) programme for local communities as “normal business expenses” that would be allowed the full recovery of input tax under the proposed Goods and Services Tax (GST).

A decision on this was made during a meeting between association officials and the Finance Ministry tax review panel headed by its chairman Datuk Kamariah Hussain at Wisma STA here yesterday.

Also attending the session were Royal Malaysian Customs Department advisor Datuk Zaleha Hamzah and senior officials.

STA treasurer Philip Choo said under the CSR programme, logging companies had funded various social and community projects that benefited local communities.

According to him, these projects include infrastructure like bridges and feeder roads, medical and healthcare services as well as educational facilities. Churches and community halls have also been built for the villagers who have received other assistance such as generator sets and building materials, from logging operators.

Choo, however, was unable to say how much logging and timber companies in the state spent a year on their CSR programme.

He said the decision to allow full recovery of input tax incurred was one of the major outstanding issues raised by the STA that had now been addressed.

STA, with the help of Ernst & Young Tax Consultant Sdn Bhd, had raised nearly 30 issues/areas of concern related to the implementation of GST in a memorandum of understanding (MoU) to the tax review panel in 2006. Most of the issues were resolved in several previous dialogues with the panel.

The issues were identified based on the feedback from a survey the association conducted to gauge its member awareness and readiness for GST implementation, and the association’s study on the GST “Discussion Paper”.

The association, which believes that the introduction of GST will have a significant impact on the operational costs of the forest and timber industry, has taken a proactive approach to engage with the tax review panel to discuss the identified issues, according to Ernst & Young executive director Koh Siok Kiat.

“The tax review panel will come up soon with guidelines on allowing full recovery of input tax,” he said.

Koh said the panel had also agreed to give GST refund to STA members, who are major timber exporters, within 14 days of their submissions. The authorities may pay interests to the exporters for any delay in the refund.

Choo said Sarawak exported more than RM7bil worth of timber products last year, and based on this figure, the refund would amount to around RM220mil.

“A delay in the refund may affect the cash flow of the exporters,” he added.

He said STA would organise a series of seminar on GST in major towns to create greater awareness among members. Speakers would include experts from the tax review panel and other tax consultants.

The authorities have indicated that the date of the GST implementation would be announced after the next general election.

In the 2005 Federal Budget, the Government made known its intention to replace the current sales tax and service tax with GST in 2007.

However, its implementation has been deferred to allow the Government to engage inclusively with businesses to ensure that the GST is well received and that regulations and guidelines are all in place.

STA , TRP gather to discuss GST impacts

by Ronnie Teo, ronnieteo@theborneopost.com. Posted on July 12, 2012, Thursday

ADDRESSING ISSUES: (From left) Choo, Koh and E&Y Kuching partner Alexander Chin 
during the press conference following STA’s meeting with TRP. STA has had three meetings 
with TRP to address about 30 areas of concern arising from the GST implementation.

KUCHING: The possible implementation of the Goods and Services Tax (GST) will leave a sizeable impact towards companies undertaking corporate social responsibility (CSR) projects, especially timber players.

This was among several issues brought forward by the Sarawak Timber Association (STA) during its meeting yesterday with the Tax Review Panel (TRP) under the Ministry of Finance here.

The idea of GST was first mooted back in 2005 to give rise to new ways of operating businesses and present a richer scope for business efficiency, compared with the current sales tax and services tax.

However, the GST implementation did not take into account its impact towards CSR projects undertaken by corporations, especially by timber players who contribute a sizeable amount of earnings towards CSR projects in logging areas.

This was further compounded by the lack of awareness by players here as uncovered by the association’s survey to gauge its members’ awareness and readiness for GST implementation.

Honorary treasurer Phillip Choo revealed that the group submitted a Memorandum on GST for forest and timber industry in Sarawak, assisted by Ernst & Young Tax Consultant Sdn Bhd (E&Y) to the TRP back in 2006.

Since then, STA has had three meetings with TRP to address about 30 areas of concern arising from the GST implementation, including general issues, issues on upstream and downstream activities, administrative and compliance matters as well as transitional issues.

“One of the major items identified as a problem area is the huge expenses incurred by timber companies to provide a lot of community projects for logging areas, such as educational facilities, healthcare, basic infrastructure and environmental projects,” revealed E&Y executive director, Koh Siok Kiat during the press conference.

When GST is introduced, Koh said there would be input tax on these expenses incurred. Under the normal GST rule, the normal tax incurred on these community project expenses would not be claimable as an input tax credit.

“Thus, STA has brought this up with the TRP on the matter,” Koh added. “Community projects are part of business expenses of the companies. The panel will come up with a guideline to allow for input tax to be claimable for expenses incurred for these kind of community projects.

“This is one of the major successes thanks to the persistence of STA in pursuing these issues,” he said.

“Another issue is regarding major exporters,” added Koh. “Quote a number of STA members are major exporters and exports are actually zero-rated.

“Therefore, input tax incurred on expenses are claimable as a refund. TRP has promised to adhere to the target of refund within 14 days. They will try to keep to this target.”

Choo highlighted on the importance for companies to obtain their refund within 14 days, judging from the high amount of refund which could reach hundreds of millions in total for these players.

“The principal of GST should not be at a cost to companies,” he opined. “If they fail to refund the tax in time to companies, this will cause cash flow problems for the players.

“That is why we are very particular on this issue.”

When asked whether TRP had indicated when GST would officially be implemented, Koh believed that there would be an official announcement made after the general election.

Thus, there was a great need for businesses to prepare for GST right now as the window for preparation might not allow for much time.

During the press conference, Koh also revealed that TRP would provide assistance to SMEs in terms of purchasing GST-compliant softwares to aid their process of coping with CST compliance.

Read more: http://www.theborneopost.com/2012/07/12/sta-trp-gather-to-discuss-gst-impacts/#ixzz2dPiKB4e7

STA , TRP gather to discuss GST impacts

by Ronnie Teo, ronnieteo@theborneopost.com. Posted on July 12, 2012, Thursday

ADDRESSING ISSUES: (From left) Choo, Koh and E&Y Kuching partner Alexander Chin during the press conference following STA’s meeting with TRP. STA has had three meetings with TRP to address about 30 areas of concern arising from the GST implementation.

KUCHING: The possible implementation of the Goods and Services Tax (GST) will leave a sizeable impact towards companies undertaking corporate social responsibility (CSR) projects, especially timber players.

This was among several issues brought forward by the Sarawak Timber Association (STA) during its meeting yesterday with the Tax Review Panel (TRP) under the Ministry of Finance here.

The idea of GST was first mooted back in 2005 to give rise to new ways of operating businesses and present a richer scope for business efficiency, compared with the current sales tax and services tax.

However, the GST implementation did not take into account its impact towards CSR projects undertaken by corporations, especially by timber players who contribute a sizeable amount of earnings towards CSR projects in logging areas.

This was further compounded by the lack of awareness by players here as uncovered by the association’s survey to gauge its members’ awareness and readiness for GST implementation.

Honorary treasurer Phillip Choo revealed that the group submitted a Memorandum on GST for forest and timber industry in Sarawak, assisted by Ernst & Young Tax Consultant Sdn Bhd (E&Y) to the TRP back in 2006.

Since then, STA has had three meetings with TRP to address about 30 areas of concern arising from the GST implementation, including general issues, issues on upstream and downstream activities, administrative and compliance matters as well as transitional issues.

“One of the major items identified as a problem area is the huge expenses incurred by timber companies to provide a lot of community projects for logging areas, such as educational facilities, healthcare, basic infrastructure and environmental projects,” revealed E&Y executive director, Koh Siok Kiat during the press conference.

When GST is introduced, Koh said there would be input tax on these expenses incurred. Under the normal GST rule, the normal tax incurred on these community project expenses would not be claimable as an input tax credit.

“Thus, STA has brought this up with the TRP on the matter,” Koh added. “Community projects are part of business expenses of the companies. The panel will come up with a guideline to allow for input tax to be claimable for expenses incurred for these kind of community projects.

“This is one of the major successes thanks to the persistence of STA in pursuing these issues,” he said.

“Another issue is regarding major exporters,” added Koh. “Quote a number of STA members are major exporters and exports are actually zero-rated.

“Therefore, input tax incurred on expenses are claimable as a refund. TRP has promised to adhere to the target of refund within 14 days. They will try to keep to this target.”

Choo highlighted on the importance for companies to obtain their refund within 14 days, judging from the high amount of refund which could reach hundreds of millions in total for these players.

“The principal of GST should not be at a cost to companies,” he opined. “If they fail to refund the tax in time to companies, this will cause cash flow problems for the players.

“That is why we are very particular on this issue.”

When asked whether TRP had indicated when GST would officially be implemented, Koh believed that there would be an official announcement made after the general election.

Thus, there was a great need for businesses to prepare for GST right now as the window for preparation might not allow for much time.

During the press conference, Koh also revealed that TRP would provide assistance to SMEs in terms of purchasing GST-compliant softwares to aid their process of coping with CST compliance.

Read more: http://www.theborneopost.com/2012/07/12/sta-trp-gather-to-discuss-gst-impacts/#ixzz2WC49Q9EM

Monash don to enlighten students on GST relevance

Publication: NSUNT

Date of publication: Jul 8, 2012

Section heading: Learning Curve

Page number: 010

THE Goods and Services Tax, or GST, is a form of indirect tax collected at all stages of the production and distribution chain.

On Nov 26, 2009, Prime Minister Datuk Seri Najib Razak announced that this much-anticipated GST would be implemented 18 months after approval in a second reading in Parliament in March 2010.

This second reading, however, was postponed and the GST Bill is instead widely expected to get its second reading after the coming general election.

While much has been debated in the media, as well as among politicians, on the implementation of GST, Professor Jeyapalan Kassipillai, Head of Business Law and Taxation from Monash University Sunway campus, believes that the GST is the way forward for Malaysia, and will be beneficial to Malaysians as a whole.

Malaysia has had 15 years of continuous budget deficit, and for 2012, the deficit is expected to be 5.2 per cent compared with a high of 7.6 per cent in 2009. In layman's language, deficit means one is spending beyond their means. The GST, when implemented, can be seen as a reformatory move to jump-start the implementation of an efficient tax administration that will be able to generate more revenue for the government, which in turn will lower that deficit, said Prof Jeyapalan, who is also a council member of the Chartered Tax Institute of Malaysia.

He believes that the implementation of GST will be fair and beneficial to Malaysians of all walks of life.

Currently, Malaysia's concealed income, which escapes the income tax net, is highly significant. But with the GST, which is a self-policing system, there is a clear audit trail and it would bring about greater tax compliance.

The zero-rating of essential items under the GST will help relieve the poor, ensuring that the GST system remains equitable where the tax burden should fall more on those who can afford it, and is mitigated for those who are economically more vulnerable.

The GST does not have to burden ordinary folk, as it all depends on its implementation. Our government has indicated that selected essentials such as rice, sugar, cooking oil, flour, and domestic transportation will be exempted, he said.

A study conducted in New Zealand shows that the rich will proportionately pay more tax under the GST system, compared with the existing system. Reason being, items spent by the rich will be subjected to GST, and they will not be zero-rated and exempted.

He cited examples of other countries such as Singapore, with a seven per cent GST rate, New Zealand's 15 per cent, the United Kingdom's 20 per cent VAT and Romania at 24 per cent. The Malaysian government has indicated that the GST will be imposed at a rate of five per cent.

The GST, when implemented in Malaysia, can be seen as a reformatory move to jumpstart the implementation of an efficient tax administration.

Prof Jeyapalan has written and presented many of his thoughts on the implementation of GST in Malaysia, and seeks to bring the relevance and importance of this subject to his students in class.

Our students need to know about policies implemented in the real world which will affect them directly. I always bring in discussions on these topics to the lecture halls so they don't become just book-smart, but industry-smart as well.

For more information on Monash University Sunway campus, visit: www.monash.edu.my

Kunta Kinte original: Sumber penentu integriti berita

2010/07/08 - 22:56:39 PM

APABILA media massa dibagi nasihat atau diarah supaya siar berita berhemah atau berintegriti, Kunta Kinte selalu kata, bukan berita sebenarnya yang utama, tetapi sumber berita. 

Pemberita hanya beritakan apa yang dibagi tahu atau dicakapkan. Dia tak boleh karang sendiri berita dengan tidak ada sumber. Itu bukan berita, tetapi cerita. Berita dan cerita tak sama. Cerita boleh direka. Berita berasaskan fakta. 

Berita kena ada sumber. Tak kiralah sumber itu manusia, dokumen atau kejadian yang pemberita sendiri tengok, macam kemalangan jalan raya. Itu pun dia kena sahkan dan sokong dengan sumber seperti saksi, polis atau pekerja ambulans. 

Memanglah dari awal lagi salah satu tujuan media adalah membina akal budi serta tahap intelektual masyarakat. Itulah matlamat kewartawanan dan persuratkhabaran kita sebelum media massa dan kewartawanan jadi kegiatan ekonomi dan sumber pendapatan. 

Tapi lama kelamaan, bila media massa dan kewartawanan jadi kegiatan ekonomi dan sumber pendapatan lumayan dan ditambah pula dengan kuasa ke atas pendapat umum, mulalah pihak yang ada kepentingan ambil alih dan kawal media. 

Pada pandangan Kunta Kintelah, yang jadi masalah bukanlah sangat media massa tak siar berita berintegriti. Yang jadi masalah adalah sumber berita yang tidak ada integriti atau kurang integriti. 

Ada masa orang yang jadi sumber maklumat itulah orang yang tidak ada integriti, misalnya seorang penjenayah atau seorang yang diketahui amal rasuah. Kerana dia penjenayah atau pengamal rasuah, orang tidak percaya kepadanya, walaupun hujahnya betul dan benar. 

Hujah atau maklumat yang dibagi oleh orang macam itu tidak ada integriti. Di depan boleh jadilah orang angguk pasal dia ada kuasa, tapi di belakang, termasuklah dalam bilik mengundi, orang tolak. 

Maksudnya, fakta yang betul dan benar belum jamin orang percaya kepada sesuatu berita kalau yang bagi fakta itu orang yang tidak ada integriti. 

Yang jadi masalah besar sekarang, pada hemat Kunta Kinte, adalah kurang kepandaian berkomunikasi di kalangan individu atau pihak yang jadi sumber maklumat. 

Bila individu atau pihak yang jadi sumber maklumat tidak pandai berkomunikasi, sama ada kerana dia tidak cerdik atau kerana kurang pengetahuan mengenai komunikasi, maklumat yang betul dan benar pun belum tentu sampai dan dipercayai khalayak. 

Maaf cakaplah kalau Kunta Kinte kata ramai orang yang hari ini jadi sumber maklumat, sama ada daripada kalangan politik, pentadbiran awam atau profesional, sangat kurang kebolehan berartikulasi. 

Tengok sajalah cara mereka berhujah di radio atau televisyen. Bahasa kucar-kacir, bercampur-aduk Melayu dengan Inggeris. Melayu tak betul, Inggeris lagi teruk. Langsung tak ada gaya. Ini bukan apa, tapi kerana malas berfikir atau tidak diajar berfikir secara sistematik. Proses artikulasi, sama ada dalam bentuk lisan atau tulisan, bermula dengan berfikir. 

Biar secerdik mana pun seseorang itu dilahirkan, dia tidak akan pandai kalau dia tidak belajar. Ilmu dan pelajaranlah yang buat seseorang itu pandai. Daripada proses inilah lahir cerdik pandai yang sandarannya adalah kemampuan mereka berfikir. 

Kita tengok akhir-akhir ini banyak kekeliruan dalam laporan media massa, contohnya mengenai isu cadangan cukai barangan dan perkhidmatan (GST), rasionalisasi subsidi dan pemindahan bangunan Parlimen dari Kuala Lumpur ke Putrajaya. 

Salah satu sebabnya adalah penghujahan, pemakluman dan artikulasi yang kucar-kacir, tidak lengkap dan hambar. Ada pihak kata GST tambah hasil kerajaan. Ada pula yang kata GST kurangkan hasil kerajaan. 

Ada kata Parlimen akan pindah ke Putrajaya. Ada kata belanja bina Parlimen baru RM800 juta. Ada kata nak guna Pusat Konvensyen Antarabangsa Putrajaya (PICC) dan ada kata belum muktamad. 

Bila rakyat jelata tanya yang mana satu betul, kita janganlah marah sebab sumber maklumat sendiri keliru dan tak pasti. Bila keliru dan tak pasti, susahlah media massa hendak siarkan berita yang berintegriti. 

Apa benda atau perkara pun bila dipertikai atau dipersoalkan, maka kurang atau hilanglah integritinya. Mana-mana pun hujah atau berita yang boleh dipertikai dan disangkal, bukanlah hujah dan berita yang berintegriti. 

Lantiklah banyak mana pun pegawai komunikasi atau setiausaha akhbar dan tubuhlah banyak mana pun agensi seranta, tapi kalau kurang daya berfikir dan berartikulasi, maklumat massa tidak akan berintegriti dan tidak akan dipercayai. 

Lebih-lebih lagilah sekarang apabila kita sedang mengalami ledakan teknologi maklumat dan telekomunikasi (ICT) yang sangat hebat di mana monopoli ke atas penyebaran maklumat dan hak berartikulasi semakin luntur. 

Kesimpulannya, berita dan maklumat yang berintegriti bermula dengan sumber dan penyampaian yang berintegriti iaitu jelas, pantas dan tegas, tanpa dolak-dalik dan flip-flop.