Govt should consider other options to boost revenue

Publication: NST

Date of publication: Sep 2, 2013

Section heading: Main Section

Page number: 020

Byline / Author: By Datuk Chua Tee Yong

BEFORE the Goods and Services Tax (GST) is implemented, the government should look at alternatives such as:

INCREASING the real property gains tax to increase the nation's revenue and curb property speculation;

STRONGER enforcement of the sales and service tax to ensure an increase in collection and revenue;

THE government should analyse the benefits of each project before implementing it. For example, if a project is not crucial, it should be implemented on a staggered basis or when the economy improves. This will enable better cash flow and management; and,

THERE should be increased efforts to reduce operating expenditure and value management to reduce and save on capital expenditure.

GST is a complex tax system that requires a lot of explanation and information to enable the public, business sectors and industries to understand it.

Issues like "duration for refund on GST", "items that are tax exempt" and "zero tax item" would require further clarification to ensure the people gain a better understanding.

As such, a clear communication plan, proper planning and implementation processes need to be in place to avoid hiccups and confusion similar to those faced during the implementation of the minimum wage policy.

The initial implementation of the GST rate should not be as high as seven per cent as this would have a negative impact on the economy.

If GST is implemented, its rate should start at three or four per cent, and it should replace the current sales and service tax.

Corporate tax and personal income tax should also be reviewed downwards.

Datuk Chua Tee Yong, MCA Young Professionals Bureau chairman and member of parliament for Labis