PwC: Need to properly educate public on GST

Publication: NST

Date of publication: Jun 7, 2013

Section heading: Business Times

Page number: 004

Byline / Author: By June Ramlee

KUALA LUMPUR: THE Goods and Services Tax (GST) is not well perceived by the public due to a lack of information disseminated by the government.

PricewaterhouseCoopers Taxation Services Sdn Bhd (PwC) executive director R.S. Raja Kumaran said this was the main reason why so many people are not in favour of the GST, which will take effect in 2015.

The GST needs to be explained properly, even to the village folk. They need to be educated on what this means from A to Z.

Many people have the notion that the GST will be implemented alongside the existing sales and services tax, which is not true at all. Once the GST kicks in, the sales and services tax will be abolished, he said after a briefing on the GST to the media at the company's training centre here, yesterday.

In fact, Raja said, the GST should have been implemented yes-terday, during the days when the country's economic stature was at its best.

The present sales and services tax is applicable to a limited number of businesses, whereas more businesses will be covered under the broader GST, which is expected to contribute an additional RM27 billion in tax money.

This (GST) just means better economic management. At pre-sent, there is so much leakage, he added.

However, he said, the poor may face difficulties once the GST is implemented.

He proposed that the government emulates Singapore's move to remedy the situation.

In Singapore, I think they gave cash handouts for 10 years and it was to the tune of S$2,000 (RM4,940) per household, he said.

He said the poor and those earning below RM3,000 a month will definitely need the handouts to ease any financial burdens.

Or the government should look at zeroing the tax rate for basic food and giving tax exemptions on medicine, housing, insurance, transport and toll to help ease the GST pinch. This is because they form a big part of the lower income group's income expenditure, he said.