GST unlikely to be announced in Budget 2013

Premalatha Jayaraman sunbiz@thesundaily.com

KUALA LUMPUR (July 18, 2012): The highly anticipated goods and services tax (GST) is unlikely to be announced in Budget 2013 as the government is still in consultation with stakeholders, including business associations, as it wants to ensure that the public fully understands the nature of the tax.

“We are continuously having engagements so that everyone knows about it (before implementation). Once it has reached all quarters, then we will implement the GST,” Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah told reporters after launching the National Tax Conference and the Inland Revenue Board’s Corporate Plan 2012-2015 here yesterday.

“Based on our engagements with associations, response has been favourable,” he said.

The GST Bill was tabled in parliament for its first reading in December 2009 but its second reading, which was planned for March 2010, was postponed.

On the second reading of the Bill, Ahmad Husni said: “We have not yet made a decision. We want everyone to understand the benefits of the GST first.”

“The government is taking into account many factors. At the moment, they are trying to gauge and understand the sentiment of the ordinary man because it is a landmark tax,” Chartered Tax Institute of Malaysia president S.M. Thanneermalai said.

“If you introduce something like this, you must make sure everyone understands the implication and does not get miscommunicated,” he said, adding that the government should take its time in introducing the GST.

“The government is ready but the question is whether the people are ready,” he added.

The GST will replace the current sales tax of up to 10% and the service tax of 6%.

The government is planning to impose a standard GST rate of 4% on all taxable supplies of goods and services and it is expected that businesses with annual turnover below RM500,000 will not be required to register for GST purposes.