Government considering raising electricity usage ceiling for GST exemption

Published: Saturday December 7, 2013 MYT 5:22:00 PM 

Updated: Saturday December 7, 2013 MYT 5:25:34 PM

BY YUEN MEIKENG

KUALA LUMPUR: The Government will consider raising the electricity usage ceiling for exemption of the upcoming Goods and Services Tax (GST).

The Finance Ministry’s GST adviser Datuk Kamariah Hussain said the tax, under its current form, would only be imposed on consumers who used more than 200kWh of electricity a month.

“However, we will study if we can raise the limit from 200kWh to 300kWh,” she said during a briefing on the implementation of the GST in Malaysia at Wisma MCA here Saturday.

The event was organised by the MCA Young Professionals Bureau, in co-operation with the Institute of Strategic Analysis and Policy Research (Insap).

During the briefing, a member of the audience as well as bureau chairman Datuk Chua Tee Yong had proposed for the Government to increase the electricity usage ceiling for exemption of GST.

“We hope the Ministry will raise it to 300kWh so that 70% of domestic users or four million consumers will be exempted from the GST,” Chua said.

Kamariah said when the GST is implemented in April 2015, it would be on top of the electricity tariff hike by Tenaga Nasional Bhd.

Effective Jan 1, the electricity tariff in peninsular Malaysia will increase by 4.99 sen per kWh (14.89%) and 5 sen/kWh (16.9%) in Sabah and Labuan.

On another matter, Kamariah said the Government will provide RM150mil to subsidise accounting software for small and medium sized enterprises which will impose GST.

Asked how long the GST will remain at 6%, Kamariah said the Government had yet to fix a time limit and stressed that the rate was the lowest among south east Asian countries.

Royal Malaysian Customs Department internal tax division director T. Subramaniam said some 200,000 companies earning above RM500,000 yearly were expected to sign up for the GST.Under the GST regime, businesses which earn an annual turnover of RM500,000 and above will have to charge consumers a 6% tax for their products and services.