Will we start paying GST next year?

Saturday, December 31, 2011

– Errol Oh, executive editor

Not going to happen.

AFTER several false starts and postponements, the guessing game on when the goods and services tax (GST) will be implemented is getting tiring. But it remains an important issue because the pressure to widen the Government's revenue base is mounting. There is no doubt that Malaysia will eventually have a broad-based consumption tax. It's merely a question of when that will happen.

Most people reckon that if Barisan Nasional wins the next general election, particularly with a stronger mandate, introducing the GST will be a priority. On the other hand, if the voting outcome is different, all bets are off as far as the GST is concerned.

Either way, we will not be paying the new tax next year, even if the general election is held in the first quarter of 2012, as is popularly predicted.

It is reasonable to expect that after the polls, a decision on whether to subject the rakyat to the GST will not be made any earlier than six months later. And if the decision is to implement the GST, the Government will need to allow a grace period of 12 to 18 months for businesses and consumers to be educated and to be ready.

There are also signs that the Government is in no hurry to push through the GST. The Goods and Services Tax Bill 2009 was not passed in the last parliamentary meeting. Perhaps the Government wants to first demonstrate that it can significantly increase its income tax revenue (by going after those who have eluded the net all this while) and that there will be more accountability and efficiency in public spending.

After all, how better to convince people to accept the GST than by showing that the tax they pay will be fair and will be put to good use?