Benefits of GST far outweigh the costs

Publication: NST

Date of publication: Sep 9, 2013

Section heading: Business Times

Page number: 002

Byline / Author: By Zaidi Isham Ismail

MUCH has been said and written about the goods and services tax (GST). Of course the GST is not perfect, but its benefits far outweigh the costs.

GST can lead to lower prices

RAM Holdings group chief executive Dr Yeah Kim Leng said with the removal of the five per cent sales tax and six per cent services tax, prices of goods can be lowered because manufacturers will be able to lower the cost of production and get rebates, which in turn translate into savings that will be passed on to consumers.

GST can lower income tax

The implementation of GST can be good news for taxpayers as it may see the country's corporate and income tax rates reduced, said Inland Revenue Board chief executive officer Tan Sri Dr Mohd Shukor Mahfar.

GST can reduce business uncertainties

PricewaterhouseCoopers Taxation Services Sdn Bhd senior executive director Wan Heng Choon said implementing GST early will help reduce business uncertainties.

Firms are unable to make decisions and start projects due to uncertainties in the implementation of GST. There has been more than sufficient time for the implementation and we need foreign direct investments.

GST can free up Petronas money

Malaysia has been too dependent on revenue generated by Petroliam Nasional Bhd (Petronas). GST will help reduce the national oil firm's burden and allow it to channel the monies to other actitivties, such as buying stakes in other oil firms and bolstering oil exploration activities worldwide.

The lower-income group will get higher BR1M

The government has given the assurance to help the lower-income group by giving out higher 1Malaysia People's Aid (BR1M) payments. Their needs are also being addressed by various schemes, such as vouchers for fuel.

Spare a thought for the 1.2 million registered taxpayers

There are 1.2 million registered taxpayers out of 13 million working Malaysians. When it comes to paying taxes, the 1.2 million bear the burden.

The tax burden should fall equally on all income groups and the government has to rebalance overall tax efficiency.

In conclusion, the government is faced with uncertain global economic conditions and a rising expenditure and widening budget deficit.

It has no choice but to implement GST, which is expected to be announced under the 2014 Budget and could be implemented as early as 2015.

The poor should not be afraid.

Surely, a GST which has already been implemented in 170 countries cannot be that bad.