Act against profiteers

Publication: NST

Date of publication: May 7, 2014

Section heading: Main Section

Page number: 019

Byline / Author: By Sukhdave Singh

WHILE the Perak Consumer Movement (PCM) supports the Goods and Services Tax (GST), despite conflicting information on its impact, it cannot be denied that the average consumer is worried if it will have an adverse impact on his livelihood.

With subsidy rationalisation efforts underway and the recent increase in fuel prices and electricity tariffs which caused a spike in prices of essentials, consumers are now more worried if GST will further impact their livelihoods.

Currently, a negative picture is painted on the issue by interested quarters.

PCM believes that GST is expected to bring about - if not in the near term, in the medium- to long-term - a reduction in the prices of goods and services as businesses pass on the benefits of reduced tax incidence to consumers by slashing the prices of goods.

It remains a worry if this will indeed happen or will the dealers simply pass on the tax to consumers without making necessary adjustments.

What if businesses take advantage by increasing prices of goods and services, squarely blaming the GST? Is the government enforcement machinery ready to act against profiteers?

PCM calls on the government to ensure all enforcement capability, with relevant laws, are ready to be deployed to attend to consumer issues and grievances with swift action against profiteers.

There is also a pressing need for more strategic and transparent communication from the government to the public and businesses to create awareness on GST.

Civil society groups must be roped in to ensure the message is communicated correctly, while consumer bodies must be encouraged to set up complaints handling units within their respective areas to support the government by channelling consumer grievances to the correct enforcement agencies for action.

As the implementation of GST is a paradigm shift in the way tax is collected in Malaysia, low-income earners should not be left in a lurch for want of action by authorities.

We have seen over the years how traders have profiteered on a handful of price-controlled items announced by government during festivities.

Sukhdave Singh,

Secretary, Perak Consumer Movement

Najib thanks social media users for backing govt efforts

Publication: NST

Date of publication: May 7, 2014

Section heading: Main Section

Page number: 002

KUALA LUMPUR: Prime Minister Datuk Seri Najib yesterday expressed his appreciation to social media users for supporting the government's efforts.

In his Facebook posting, Najib said he had received encouraging feedback from five social media personalities in a hangout session, where he had a heart-to-heart chat with them.

"I was heartened to meet like-minded social media users who were willing to give their support to national reconciliation and nation-building," he said.

The casual get-together, organised by Najib, was held at Jibby & Co Restaurant, Empire Shopping Gallery, in Subang Jaya on Monday night.

The discussion revolved around topics such as the Goods and Services Tax (GST), national unity as well as the missing Malaysia Airlines flight MH370.

The personalities present were Saiful Nang, Asep Ahmad Sastrawidjaja, Siti Aishah Rahman, Dr G. Balamurugan and William Cheah, all popular figures on social networks with a strong following.

"They may provide me with a different perspective on issues that are close to the hearts of the people.

"As the prime minister, I am ready to hear what the public has to say about what we have done for the country."

A check on the personalities' Facebook pages revealed their respect for Najib's efforts in engaging the public and for showing his side as a humble person while helming the country.

Najib thanked the Facebook personalities for attending the meet-up session and shared a picture of the gathering.

Dewan passes GST bill

Publication: NST

Date of publication: May 6, 2014

Section heading: Main Section

Page number: 006

Byline / Author: By Adib Povera

KUALA LUMPUR: THE Goods and Services Tax (GST) Bill 2014 was passed after the third reading at the Dewan Negara last night.

Dewan Negara Deputy Speaker Senator Doris Sophia Brodi announced that the bill was passed at 8.34pm, after it was debated for seven hours by 32 senators, with most voicing support for the implementation of the new taxation system.

Deputy Finance Minister Datuk Ahmad Maslan, during the winding-up for the debate on the bill, said theGST was needed as there were weaknesses in the present taxation system which could hinder the country's growth and stymie efforts to become a high income nation.

The bill seeks the replacement of the present sales and services tax with a rate of up to 16 per cent slashed down to six per cent under the new system.

"We want to improve our taxation system. The mechanism under the GST is more effective and transparent," Ahmad said.

He projected that the country's gross domestic product (GDP) would grow by 0.3 per cent after the GST is enforced. Trading activities would also continue to flourish, creating more business opportunities.

"The introduction of the GST will also close the income gap among the high, middle and low income groups."

He said the Finance Ministry had identified 689 items that will be taxed under the GST, with only 73 items incurring a price increase.

"From the items identified, 48 per cent, or 349 items, will not be affected. Their prices will remain the same after GST.

"Its implementation will also see a drop in price for 287 items taxed under the new taxation system," he said, adding that the ministry was considering whether to include another 255 items to be taxed under the new system.

To avoid unscrupulous traders from taking advantage by hiking the price of goods following the introduction of the new tax, Ahmad Maslan said the government would issue a shopping guide for consumers to protect them from being duped.

He said the shopping guide would be released about three months before the GST comes into force, on April 5 next year, adding that the GST would not be imposed on basic food items and necessities.

Although the consumer price index would go up by eight per cent after the implementation of the GST, he stressed it would be a "one-off" increase because of the transition from the old to the new taxation system.

As seen by the 160 nations which have adopted a form of GST, Ahmad Maslan said inflation would stabilise after the implementation of the new taxation system.

Earlier, when debating the Bill, several senators criticised the opposition for the rally held to protest against the implementation of GST on May 1.

Senator Datuk Megat Zulkarnain Omardin said the opposition feared that Barisan Nasional would gain greater support from the people after the GST was implemented since it was a good taxation system.

Senator Choong Sin Woon said the demonstration was another political ploy by the opposition.

"The opposition condemned the implementation of the GST but they failed to be constructive about it. I have checked social media sites clamouring about anti-GST (measures), but none provide any alternative to the taxation system."

The GST Bill was passed at the Dewan Rakyat after the third reading on April 7.

GST exemption may be widened

Publication: NST

Date of publication: May 6, 2014

Section heading: Main Section

Page number: 002

Byline / Author: By Azura Abas; Sarah Rahim

PUTRAJAYA: THE government may exempt more goods and services from being subject to the Goods and Services Tax (GST).

Prime Minister Datuk Seri Najib Razak said the government would look into adding more goods and services to the list of items to be exempted from GST, as long as efforts to expand the country's revenue base were not compromised.

"We can look into more items to be exempted, as long as we can still have a larger revenue base for the country, which will allow us to drive the nation to greater heights," he said at the Prime Minister's Department's monthly gathering here yesterday.

He said a larger revenue base would allow the government to build more infrastructure in urban and rural areas, among others, adding that failure to put vital infrastructure in place could result in Malaysia lagging behind.

"If we don't build modern infrastructure, we will lose our competitive advantage. This is really important. We also need to spend more on human capital, a critical factor to strengthen the nation, and on healthcare, too, as there is a need for more hospitals and medical equipment to meet the needs of the people."

Najib said the government needed funds to look after the welfare of 1.5 million civil servants. He said this could only be achieved if the government had a viable revenue source, without burdening the people.

He said the government needed to ensure that continuous efforts could be carried out to boost the nation's status for the benefit of the people. He said if GST had proven to be effective in 90 per cent of countries around the world, then it must be a progressive, fair and acceptable tax system.

"Otherwise, the people in these countries would have rejected it."

GST will be rolled out from April 1 next year at a fixed rate of six per cent to replace sales and services taxes, which are at 16 per cent.

Najib likened the GST system to taking antibiotics.

"When we take antibiotics, we need to complete the full course. When you have done so, your health will be restored. So, in our journey to transform the nation, we need to swallow the 'bitter pill'.

"But have faith, as in the end, we will benefit from it and become a successful nation.

"I hope civil servants will inform the people of our efforts and how it will benefit the public and nation in the long run."

He warned of the dangers of populist politicking and short-term measures to attain immediate results.

"We have to look at long-term measures that may require us to go through minor hardship for long-term gains. Look at what happens when one plays (the) populist politicking (game).

"The Klang Valley water issue is a clear example of a populist policy."

Najib said the proposal to build the Langat 2 water treatment plant was made by the Federal Government to address an imminent water shortage crisis in the future, but this was shot down by the Selangor government.

"If the proposal to build Langat 2 had been accepted earlier, many would have been spared (from the water cuts)."

On Malaysia's success story, he said it was a testament that the country had a government with the ability to make long-term plans.

"During United States President Barack Obama's visit to Malaysia, he saw the progress that we have made in the past 48 years since the visit by former president Lyndon B. Johnson, who was brought to rubber estates. Obama did not see rubber trees, but a successful nation that has undergone a major transformation process."

A young player amid giants

Publication: NST

Date of publication: May 5, 2014

Section heading: Business Times

Page number: 005

Question: How has the Sabah palm oil industry evolved?

Answer: I did a presentation at ISP National Seminar in Kota Kinabalu in 2010 and my research revealed the following early agri-transformation in Sabah.

Before oil palms, agriculture in Sabah was very much into collecting rattans from jungles, padi planting, tobacco planting, harvesting Manila hemp and venture into cocoa plantation later.

My research revealed that first trial planting of oil palm in Sabah was in 1957 using seeds collected from the jungle in Mostyn estate, Tawau. This was later expanded to the first 200 acres of commercial oil palm planting in 1959.

Sabah's upstream oil palm planting reached its first 100,000ha by 1981. Within the next two decades, it reached its milestone of one million hectares.

The latest 2013 figures from the Malaysian Palm Oil Board showed Sabah gas 1.48 million hectares planted with oil palms, equivalent to 28 per cent of the total area planted with oil palm in Malaysia.

It is the largest palm oil-producing state in Malaysia.

Last year, Sabah's midstream and downstream activities comprised 124 palm oil mills, 13 palm kernel crushing plants and 12 refineries.

Question: How significant is the crop's contribution to the state?

Answer: The crop has provided a sustained flow of income to entrepreneurs and has benefited the state in many ways.

An important source of revenue for the state is derived from the sales tax amounting to 7.5 per cent for crude palm oil (CPO) gross prices (above the threshold CPO price of above RM1,000 per tonne ).

In 2013, Sabah produced 5.78 million tonnes of CPO, or 30 per cent of Malaysian production of 19.22 million tonnes.

Using the national annual average CPO price of RM2,371 per tonne in 2013 as reference, the estimated sales tax worked out to be RM1.027 billion.

Sabah is expected to continue collecting revenues from the State Sales Tax (SST) even after the goods and services tax (GST) is implemented in 2015 as SST is a resource under the jurisdiction of the Sabah and Sarawak governments, as stipulated under the Federal Constitution.

Question: How has the rakyat benefited?

Answer: In Sabah, jobs were created for the rakyat across the palm oil supply chain.

These include areas covering research, nurseries, estates, mills and other downstream activities; and many other aspects of service-provision jobs, such as administration, purchasing, human resource, information technology, training, sales and marketing, logistics and others.

The oil palm business along the supply chain has also created numerous multiplying effects and spinoff businesses, which have also benefited the rakyat.

In short, the rakyat has been incorporated as relevant stakeholders - both directly and indirectly - in the palm oil supply chain in Sabah.

Question: What more can be done?

Answer: One must appreciate that palm oil is a commodity and as such is "a price taker and not a price maker".

The venture is also a long-haul one and will be subjected to the vagaries of extreme weather, low start-up yields and other biological interactions.

The business game for sustainability is to derive a comfortable margin between the derived commodity price and the escalating cost of production.

Over the years, various parties have called for a restructuring of the SST on CPO via a revision of the threshold price upward from the present RM1,000 per tonne to RM2,000 per tonne in the light of rising production cost and other statutory charges being levied on the growers, such as windfall levy, charges and cesses.

A two-tier sales tax system has also been advocated, similar to the practice adopted in Sarawak based on equity taxation, which is deemed more accommodative vis-a-vis the fluctuating CPO commodity prices.

Question: What are IJM's contributions towards Sabah's palm oil industry?

Answer: IJM Plantations Bhd is but a smaller and younger player amid the many giants like Felda, IOI, Sime Darby, Wilmar, Kuala Lumpur Kepong and Sawit Kinabalu in Sabah.

Since our humble plantation saga back in 1985, our contribution to the palm oil industry in Sabah is set against our strong fundamentals already in place, where the group continues to augment the business activities based on its core competency - namely in oil palm cultivation, research and advisory and midstream milling processes.

Today, we are proud to be among the best in the Malaysian plantation fraternity in terms of productivity and good plantation practices.

Educate people about GST, fast

Publication: NST

Date of publication: May 5, 2014

Section heading: Business Times

Page number: 002

Byline / Author: By Zaidi Isham Ismail

MALAYSIA, along with the rest of the world, celebrated Workers Day last Thursday to honour some 13 million of the country's workforce in the civil and private sectors.

Sadly, the opposition used the public holiday as a platform to protest against the goods and services tax (GST), which will be enforced in April next year.

Judging from news reports, it is clear that some of the rakyat who participated in the demonstration did not even know what GST is all about.

Now is not the time for fingerpointing and the opposition should have not used the event to mislead the rakyat.

The authorities, on the other hand, must intensify efforts to explain GST to the rakyat - fast.

It is disturbing to see a protester accusing the government of taxing everything under the sun when she did not even have a clue that basic items, such as sugar, rice and flour, are tax-exempt.

Another protester did not even know that the GST would replace the inefficient sales and service tax.

It was heartening when Deputy Finance Minister Datuk Ahmad Maslan said over the weekend the government would appoint officials to explain to the rakyat about GST.

To recap, here are some salient points of GST:

- GST is not an additional tax as it will replace the sales and service tax;

- The government cannot rely solely on Petroliam Nasional Bhd for money. It has to diversify sources of income and GST is one option;

- In order to get GST rebates, business operators must register with the authorities, unlike the sales and service tax, which is full of loopholes. Restaurant operators could charge customers but not remit the money to the government;

- GST is a consumption tax. The more the customers use, the more they have to pay;

- GST will ensure that all Malaysians pay tax; and,

- GST is already implemented in more than 160 countries.

Asia going full steam ahead

Publication: NST

Date of publication: May 3, 2014

Section heading: Main Section

Page number: 017

Byline / Author: By Alex Mourmouras

ASIA is well-positioned to capitalise on the largely favourable global trends and enjoy steady growth in 2014-15. Recent policy actions taken to address vulnerabilities have started to bear fruit.

With vigilance and further reforms, the region should remain resilient to global risks and continue to be a dynamic force driving the strengthening global recovery.

Against this backdrop, the outlook for Malaysia is favourable: growth is projected to accelerate to about 5.2 per cent this year as exports improve, offsetting some headwind from fiscal consolidation, and a slight moderation in consumption and investment growth.

The overall outlook for Asia is one of steady, robust growth and the International Monetary Fund's latest Regional Economic Outlook for the Asia-Pacific region forecasts growth of about 5.5 per cent in 2014-15; no longer as stellar as a few years ago, but still enviable.

The outlook for growth is supported by a firming up of global activity, which will help Asia's exports. Growth momentum has gathered steam in the United States and the euro area, thanks to a reduction in fiscal tightening and still-accommodative monetary conditions.

Additionally, the largest economies in the region are also doing relatively well, despite some challenges.

In China, the unveiling of the government's reform agenda has boosted sentiment and growth should moderate slightly to 7.5 per cent this year. Meanwhile, "Abenomics" has lifted confidence and inflation in Japan, and growth there should remain above trend at 1.4 per cent this year.

Furthermore, this favourable external environment is benefiting the rest of the region, together with healthy labour markets and robust credit growth in many economies.

So far so good for Asia, but there are tangible downside risks to this outlook. An unexpectedly rapid tightening of global liquidity would affect the region. For many countries, domestic vulnerabilities could magnify the impact: as interest rates rise, vulnerabilities stemming from pockets of high corporate leverage and household indebtedness could come to the fore.

Asia is also facing various risks originating from within the region. These include a sharper-than-envisaged slowdown and financial sector vulnerabilities in China, a waning impact of "Abenomics", and political tensions and uncertainty.

Throughout Asia, including in Malaysia, a continuation of the recent macroeconomic and structural policy momentum would help keep risks at bay, maintain investor confidence and sustain the region's growth leadership.

Last year was a breakthrough year for fiscal policy in Malaysia. With the 2014 Budget, the authorities clearly signalled their commitment to fiscal consolidation and meeting medium-term fiscal targets.

The establishment of the high-level Fiscal Policy Committee is welcome, and should enhance fiscal management and strengthen institutions. In addition, subsidies on fuel, electricity and sugar are being rationalised, and a Goods and Services Tax (GST) will be introduced in April next year. These vital steps will help shore up fiscal policy management and secure fiscal sustainability policy.

While still moderate, inflation has picked up over recent months. The uptick in inflation is largely the result of temporary factors, namely, higher fuel and food prices associated with subsidy rationalisation, and also the effects of dry weather conditions in the peninsula. Ongoing subsidy rationalisation and the implementation of GST can also be expected to increase inflation later this year and next year.

However, the increase is not expected to be long-lasting and inflation should moderate below three per cent over the medium term. Bank Negara Malaysia's (BNM) task in the near term is to allow the pass-through of these price increases, while remaining vigilant and taking decisive, preemptive action, if needed, to curb second-round effects.

As in other Asian economies, the strong growth in household debt and rapid increase in house prices present a vulnerability. Since end-2010, the authorities have imposed a series of targeted, gradual and escalating macroprudential policies to mitigate this vulnerability.

However, should credit growth remain strong, additional measures may be needed, with the scope and stringency depending on the evolving stance of monetary policy.

Nevertheless, Malaysia's financial system is sound, bolstered by a strong supervisory and regulatory system, and appears well-placed to withstand potential shocks, based on results from stress-testing analysis. With the gradual withdrawal of unconventional monetary policies in advanced economies, Malaysia and other emerging market economies may face renewed capital flow volatility.

Malaysia's vulnerability is related to its relatively high level of federal debt and large foreign holdings of government securities.

Nevertheless, the country had weathered recent bouts of volatility relatively well, reflecting its well-developed financial system, large base of institutional investors and strong external position; as a result, there was little impact on the real economy.

Looking ahead, the implementation of planned fiscal consolidation and reforms, together with the strong external position, should further enhance its resilience to shocks.

Getting to know the GST

Publication: NST

Date of publication: May 3, 2014

Section heading: Main Section

Page number: 014

THE demonstration on Thursday to protest against the Goods and Services Tax (GST) commanded quite a good turnout, which was trumpeted by the opposition as being a resounding rejection of the government-proposed GST. That many people were unhappy with the GST was obvious, if attendance at a rally is any measure. Most who attended lamented the fact that, as a result of the GST, prices would go up. But, what would have added fuel to the fire must surely have been that many among those randomly polled were actually unclear on what exactly the GST entailed. And, while it would not be so unexpected for a political opposition to seize the opportunity to mislead the public on the matter, the fact is that even without political intervention, the people's ignorance on the new tax would be more than sufficient to stoke the fire of discontent.

The GST, as the prime minister has explained, is a rationalisation of existing consumption taxes and is intended to overcome the problem where, in effect, only one in 10 of eligible working Malaysians is paying their personal income tax. The consequence will be that those who do not declare their earnings will be taxed, albeit indirectly. Given that every person is a consumer, this method of taxing better spreads the national burden. Numerous examples around the world paint a scenario that suggests that in actuality, life will go on as usual after the tax's introduction, which, in Malaysia, will be in April next year. This would be especially so, since the GST will replace the current sales and services taxes. There are also extant examples worldwide, which have discredited claims that it is necessarily regressive. If not carefully tailored, it can indeed be regressive, but it is generally in the interests of a government to ensure that in introducing such a consumption tax, it achieves its intended objective without penalising the economically unfortunate. Any notion that the GST would further impoverish the poor will depend on the exemptions given. But, as with the British Value-Added Tax, the list can be exhaustive to guarantee social justice.

The government has said it would go ahead with the GST, regardless of the protests. Certainly, no government would be able to get any work done if it backed down upon every single protest. Nevertheless, it is always more preferable to get the populace on board with any new policy and, especially, with this one, since it will affect every citizen. For that to happen, it is crucial that the government utilise the 11 months counting down to the GST's implementation to prepare the public for it. Since part of what drives fear is the unknown, it is incumbent upon the proposer to convince the public that its fears are unfounded. Without this effort, it would be too easy for such a fear to be exploited.

Enforce GST after reducing income gap

Publication: NST

Date of publication: May 3, 2014

Section heading: Main Section

Page number: 008

KUALA SELANGOR: Menteri Besar Tan Sri Abdul Khalid Ibrahim said he personally supports the implementation of the Goods and Services Tax (GST) but cautions that it is not the right time to do so.

GST, he said, was a comprehensive method of collecting taxes and was accepted by many countries.

He said Pakatan was only concerned about the effectiveness of its implementation.

"I am one of those who encouraged GST to be implemented but not at this time. This is because of the imbalance of income in our society," he said at a handover ceremony for a mosque from the Public Works Department to Selangor Islamic Religious Deparment at Masjid Darul Ibadah in Ijok yesterday.

"When the GST is implemented, the low-income group will feel the burden more than the high-income group.

"If the price of 'Kopi O' increases by 10 sen, a person who earns RM1,000 will feel a greater impact than the one who earns RM3,000 a month.

"The right time to implement GST is when the income gap between the citizens have been overcome."

Khalid said although many top PKR leaders did not turn up at the recent anti-GST rally, they supported the protest.

On his tweet on Wednesday that he would not seek a third term as Selangor MB, Khalid said he would not change his mind as he had already informed the sultan of Selangor.

`Opposition hasn't shown alternative plan to GST'

Publication: NSUNT

Date of publication: May 4, 2014

Section heading: Main Section

Page number: 002

KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak has hit out at the opposition for criticising the Goods and Services Tax (GST) without providing an alternative policy to boost the country's revenue.

He said the opposition should put forward its own plans if it did not agree with the government's policies.

"It is easy for them to hold mass rallies to oppose GST and call for the public to overthrow the government, (but) they themselves have not shown how they plan to tackle national issues.

"Such behaviour does not reflect a thinking society," he said, referring to the anti-GST rally here on Thursday.

Najib was speaking at the launch of the Malaysian Senators' Council (MSM) last night.

He said more than 160 countries in the world had implemented GST, which proved its effectiveness.

"Even if we lack understanding on what GST entails, that fact should put our fears to rest - 160 countries can't be wrong."

Najib called on the country's senators to continue raising the quality of debates in the Dewan Negara.

He said senate debates had improved greatly in recent days, with the Dewan Negara creating history on Wednesday when the sitting lasted past midnight to ensure outstanding issues were resolved.

"We want to hear more well-rounded debates from all senators, and not only on matters that represent their own interests or fields of expertise.

"They must serve as a check and balance, and provide different perspectives to the Dewan Rakyat."

Present at the launch were Najib's wife, Datin Seri Rosmah Mansor, Dewan Negara president Tan Sri Abu Zahar Ujang and MSM president Datuk Abdul Rahim Abdul Rahman.

Most do not know what GST is

Publication: NST

Date of publication: May 2, 2014

Section heading: Main Section

Page number: 010

Byline / Author: By Shahrum Sayuthi; Syed Umar Ariff; Kalavaani Karupiah; Hashini Kavishtri Kannan; Atiqa Hazellah; Balqis Lim

KUALA LUMPUR: Most of the people attending the rally to protest against the Goods and Services Tax (GST) here yesterday did not understand how it works.

Those interviewed were of the opinion that the GST will lead to a hike in the prices of goods and that its implementation will burden the people, particularly those from the low-income group.

Private sector worker Siti Hanum Samsudin, 25, said she took part in the rally because she feared the GSTwould lead to an increase in prices of goods.

"The prices of goods are increasing and I'm afraid they will increase even more once the GST is implemented," she said, adding that she arrived with her family at 8am from Jempol, Negri Sembilan, to take part in the rally at Dataran Merdeka.

Her younger sister, Siti Suhaila, 22, said the introduction of GST would further burden the people.

However, both sisters could not explain the meaning of GST, or the taxation it entailed.

The GST, which will take affect on April 5 next year, will replace the present Sales and Services Tax (SST). The GST imposes a flat rate of six per cent as opposed to the varying sales and service tax, which ranges from five to 10 per cent.

More than 160 countries worldwide employ the GST, as it is an efficient system to remain competitive.

Lorry driver Harikrishnan Toreas, 32, said he understood the GST as a tax that would affect suppliers when they sold their goods to traders, and this could cause a hike in prices of goods.

Meanwhile, business owners and traders in Jalan Tuanku Abdul Rahman and other areas affected by the rally said they incurred huge losses.

'GST vital to high-income nation goal'

Publication: NST

Date of publication: May 2, 2014

Section heading: Main Section

Page number: 002

Byline / Author: By Adie Suri Zulkefli; Jasmime Kaur: Zahratulhayat Mat Arif

ALOR STAR: THE implementation of the Goods and Services Tax (GST) will help prevent the country from falling into the middle-income nation trap and enable it to strive towards becoming a high-income nation, said Prime Minister Datuk Seri Najib Razak.

The government, he said, needed a more efficient tax system to improve its revenue collection and ensure the country's economic resilience will take a leap from an emerging economy to an advanced economy nation.

He said only one out of 10 working Malaysians were paying personal income tax and the GST would give the government a broader and more efficient tax system to improve its revenue stream.

"By earning higher revenue, the government can continue with its transformation programme to stimulate the economy and improve our competitiveness in attracting investors so that we can create more job opportunities.

"We cannot simply apply for loans from foreign lending institutions as this will compromise the level of confidence in our economy.

"Sometimes, we need to wait several years to reap the fruits from the seeds that we plant today. But if we do not plant the seeds, we will never reap the benefits," Najib said in his speech during the national-level Civil Servants' Workers Day celebration in Dewan Wawasan, Jitra here.

Present were Menteri Besar Datuk Seri Mukhriz Mahathir, the Congress of Unions of Employees in the Public and Civil Service (Cuepacs) president Azih Muda, Chief Secretary to the Government Tan Sri Dr Ali Hamsa and Inspector-General of Police Tan Sri Khalid Abu Bakar.

He said the government had significantly reduced the country's poverty rate from 60 per cent in the post-Independence era to below 1.7 per cent in 2012 and could not risk endangering the ongoing economic transformation programme.

Najib said despite global uncertainties, Malaysia still recorded a gross domestic product growth of 4.7 per cent last year and was expected to perform even better this year.

"We are on the brink of transformation to become an advanced economy from an emerging economy. If we stop this transformation now, we will expose the country and the people to grave risk."

Najib assured civil servants that the government had taken the livelihood of the people into consideration before proceeding with the transformation programme.

He urged the people to see things from a wider perspective, although at a glance, the transformation programme, such as the GST implementation, was viewed as unnecessary and uncalled for.

"The government has strong reasons to proceed with the transformation. We hope the people will react to this in a rational manner."

Najib, who is also Barisan Nasional (BN) chairman, told the 5,000 crowd that the BN government had no plans to reduce the 1.5 million civil servants employed nationwide, while reassuring them that, in fact, it was planning to do more to improve their wellbeing.

"Some leaders from the opposition said they would reduce the number of our civil servants by up to half if they come into power. They said the 1.5 million figure is too large for our 29 million population." Additional reporting by Zahratulhayat Mat Arif

Malaysia's adex growth to remain bullish this year

Publication: NST

Date of publication: Apr 30, 2014

Section heading: Business Times

Page number: 004

RHB Research says Malaysia's gross advertising expenditure (adex) saw a kickstart in the first quarter and should remain bullish this year.

"We continue to believe that an eventful year like 2014 will augur well for adex growth, with FIFA World Cup 2014 being a positive catalyst," said the research house.

But the positive catalyst may be mitigated by the higher cost of living, coupled with advertisers being more cautious on spending ahead of the implementation of goods and services tax (GST) in April 2015.

Moreover, the alternative media platform such as Internet-based advertisements may dilute the adex figures for traditional platforms, thus warranting the research house's "neutral" view on the sector.

"We like Media Prima Bhd for its solid financial position and attractive dividend yields. Catcha Media Bhd is expected to report a healthier set of results this financial year. As with Astro Malaysia Holdings Bhd, its valuation remains lofty. Meanwhile, Media Chinese International Ltd still lacks a strong growth catalyst that will propel earnings," RHB Research said yesterday.

The firm said Malaysia's total gross adex grew by 14.7 per cent in the first quarter of 2014 with most media registering growth, except for radio and point-of-sale, which reported a slight decline. Pay TV continued to grow strongly to capture larger market shares.

However, Media Prima Bhd's channels still reported healthy growth in adex for the first quarter of this year.

Among the newspapers, the English papers charted the strongest growth in adex revenue, followed by Malay papers. However, Chinese newspapers' adex declined.

"Pay TV charted the strongest growth of 29 per cent, followed by newspapers (nine percent) and free-to-air or FTA TV (eight per cent). If we were to exclude Pay TV's adex, the growth would be 7.9 per cent.

GST may pose cash-flow woes for palm oil refiners

Publication: NST

Date of publication: Apr 26, 2014

Section heading: Business Times

Page number: 005

Byline / Author: By Ooi Tee Ching

PETALING JAYA:CASH-STARVED palm oil refiners, especially small cooking oil repackers, may face cash-flow problems if the Customs Department's payment of claims under the goods and services tax (GST) is not carried out in a timely manner.

"Millers will charge us a six per cent GST upfront on purchases of crude palm oil (CPO).

"As refiners, we're not allowed to pass on this cost to our clients as exports of palm oil are zero-rated under GST. This means, we are expected to make our monthly tax claims to the Customs and we're promised of refund within two weeks," said Palm Oil Refiners Association of Malaysia (Poram) chief executive officer Mohamad Jaaffar Ahmad, here, yesterday.

He gave an example of a typical refinery buying 20,000 tonnes of CPO from the miller in a month.

At the current price of RM2,500 per tonne, the purchase works out to be RM50 million monthly.

So, the six per cent GST on RM50 million worth of CPO is RM3 million.

"That's RM3 million a month stuck in the system for every refiner.

Compared to oil palm planters who make reasonably good profits, the refinery business is very much a play of margins.

"Sometimes, when CPO prices jump, we've no choice but to tolerate negative margins," he said.

"Come April 2015, if the Customs collection and refund system is not robust enough to execute timely payments, the financially weaker refiners among us will definitely face cash-flow problems.

"Time is money and refiners operate on tight margins," Mohamad Jaaffar said.

It was reported that Customs director-general Datuk Seri Khazali Ahmad said his agency would be using a new software to facilitate the GST implementation.

Known as MyGST, it was developed at a cost of about RM100 million.

"The MyGST system will be integrated with the National Registration Department and the Companies Commission of Malaysia.

Later, it will also be linked to all the banks in the country," he said.

Last month, Deputy Finance Minister Ahmad Maslan announced the government had allocated RM150 million in subsidy for small and medium enterprises to purchase GST-compliant accounting software.

He also said the GST will allow the government to reduce its reliance on income tax and petroleum earnings.

It was reported that the Customs is expected to reap RM22 billion per year when GST is implemented, about 40 per cent more than the RM16 billion collected from the sales and services taxes currently.

2014 MALAYSIA PROPERTY OUTLOOK

Publication: NST

Date of publication: Apr 25, 2014

Section heading: 1Klassifieds

Page number: 001

Byline / Author: By Gerald Chuah

VETERAN property investor Dr Peter Yee, author of Property Secrets and Hierarchy of Money Skills said when it comes to property investment, it is important to "buy on the upcycle and sell on the way down."

With more than 20 years experience as a real estate property investor, Yee said property investors must leverage on the property market cycle, which follows closely the economic cycle.

"At the moment, there is an oversupply of unaffordable property prices in many locations, and the property market will readjust itself to this new equilibrium in 2014," he predicted.

Yee said that mistakes in property investment can be very costly and will take a long time to recover, as such it is important to take calculated investment risks.

Below, he examines some of the key factors which may affect property boom and bust cycles for the rest of the year.

* REAL PROPERTY GAIN TAX

The 2014 Malaysia Property outlook is getting more challenging at this rapidly changing market with the introduction of the new Real Property Gain Tax (RPGT) in 2014's budget and the anticipated (Goods and Services Tax) GST in April 2015.

He explains: "After the 2008 US subprime crisis or property bubble. Malaysia's property market has enjoyed a super boom for five years from 2009 to 2013 mainly due to the massive printing paper money globally, or Quantitative Easing's (QE's).

Property prices in Klang Valley, Penang and major towns has increased dramatically about 30% to more than 100% in the past few years.

The supply of new property increases along with the increase in property prices and profitability.

The Malaysian's Government has also increased Real Property Gain Tax (RPGT) in budget 2014 to curb property speculation and to stabilise the property market.

The Malaysian's property market began to slow down after the announcement of 2014 Malaysian's budget. The new rates for RPGT 2014 is as followS:

For Malaysian citizens, RPGT is 30% for 1st-3rd year, 20% for 4th year, 15% for the 5th year. For properties sold after the fifth year, no RPGT will be imposed. Non-Malaysian investors however, will only be eligible to purchase property costing RM1 million and above.

* HOUSEHOLD DEBTS

Malaysian household debt to Gross Domestic Product (GDP) at the end of 2013 is 86.8%. According to Bank Negara Malaysia's (BNM) statistics, house purchase amount to 44.6% household debts, followed by car purchase at 17.6%, personal loans at 16.8% and credit card debt at 4.2%.

Generally, a household debt service ratio of 30% or below is consider good household debt management.

In 2010, Malaysian household debt service ratio was 47.8%. By now, it should be more than 50%, that means on average more than half a household's income goes to repaying debts and not much left for living expenses. The sudden increase in interest rates may lead to debts crisis and property bubble in Malaysia.

Property boom and bust cycles are certain but the quantum and duration varies. It is similar to natural cycles of the sun and the moon, rises and sets. Property bust or crisis in 2008, followed by a super boom for five years from 2009 to 2013.

The high debt levels such as household service ratio above 50%, and household debt to GDP in 2013 is 86.8%. House purchases amount to 44.6% of total household debt.

* GOODS AND SERVICES TAX (GST)

The proposed change in the Government's policy of Goods and Services Tax (GST) in April 2015, standard rate of 6% will be imposed on all building materials and services. The additional costs of production will be translated to higher new property prices.

The overall price increase for new residential properties could be marginally lower than the new commercial properties due to the different tax structures.

The anticipated price increase in new properties may stabilise the slowing property market in 2014.

* OVERSUPPLY OF PROPERTIES

At the moment, there is an oversupply of unaffordable property prices in many locations and the property market will readjust itself to this new equilibrium in 2014.

Location, type of property, and timing could be the main determinant of property prices. Properties in good location with limited supply will not drop in prices. The oversupply of high-rise residential properties such as apartments and condominiums may correct itself.

The high-end landed residential properties such as super link, semi-detach and bungalow houses may also correct itself due to rental income, which is not sufficient to support the monthly bank's repayment.

The over supply of office space and retail space may also correct itself due consumer's high debt level. Overall, the property prices correction will happen partly due to high debt level and over supply of unaffordable properties.

* UNDER CONSTRUCTION PROPERTIES

The risks of under construction properties are also getting higher for purchasers and developers due to the introduction of GST in April 2015, and cyclical nature of property market.

After a period of property price correction and consolidation, property prices may go higher than the current high, as the value of fiat paper money will eventually drop to zero.

In summary, my proposed 2014 property investment wisdom and strategy is to reduce, or sell a liability type of overvalued property with no rental income or negative cash flow, and keep, or buy undervalued positive cashflow properties for perpetual rental income and capital gain.

* Peter Yee is an author of "Property Secrets" and "Hierarchy of Money Skills". You can reach him at www.PeterYeeProperty.com.

Registration for GST opens on June 1

24 April 2014| last updated at 05:49PM

PETALING JAYA: A taxable person who is required to be registered under the goods and services tax (GST) regulations can start registering with the dedicated portal http://gst.customs.gov.my from June 1, a Royal Malaysian Customs officer said today.

Fazilah Ariff, the department’s Senior Assistant Director (1), GST Division, said early registration would enable businesses to prepare for the smooth GST implementation when the tax comes into force on April 1, next year.

“The first step to be GST-ready is to register for a GST identification number. You need to check whether you are required to register or whether you want to register voluntarily. 

“Being a GST registered person would allow one to be more prepared, for example, printing the tax invoice with the 12 digits GST identification number generated by the portal,” she told participants at the "Automotive Info Talk" on the GST today.

In explaining the salient features of the GST, Fazilah said, the definition "persons" means an individual, sole proprietor, partnership, company, trust, estate, society, union, club, association or any other organisation, a government department and a local authority involved in business making taxable supplies in the country.

The GST requires a person, who makes taxable supply of goods and services in Malaysia, exceeding the prescribed threshold to register and to keep records of tax inputs and outputs, she said.

She said the calculation of the turnover for registration was based on the total value of the taxable supplies for a 12-month period with people having businesses with an annual sales turnover exceeding RM500,000 are liable to be registered under GST.

"While registration is mandatory for businesses with a turnover that has exceeded the prescribed threshold, businesses below threshold may also apply for voluntary registration, she said.

Fazilah, who exchanged ideas with the participants and speakers from the department, also explained the entitlement to claim for the input tax, other responsibilities and obligations as a registrant under the GST.

The speakers advised the participants and the people to check on the GST portal for other details and informative updates on the GST.

Some 450 automotive industry players and stakeholders attended the one-day seminar hosted in collaboration with the Malaysia Automotive Institute, an agency under the purview of the International Trade and Industry Ministry. -- BERNAMA

Read more: Registration for GST opens on June 1 - Latest - New Straits Times http://www.nst.com.my/latest/registration-for-gst-opens-on-june-1-1.577839?cache=03%2F7.225094%2F7.259703#ixzz2zs8lbtGd

People more receptive to GST, says Hasan

Publication: NST

Date of publication: Apr 21, 2014

Section heading: Main Section

Page number: 021

KUALA LUMPUR: The majority of Malaysians now have a better understanding of the concept behind Goods and Services Tax (GST), which will be implemented in April next year.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek said the people were more accepting of the GST and its implementation now that they had a better understanding of it.

Prime Minister Datuk Seri Najib Razak, when tabling the 2014 Budget, had announced the implementation of GST, which replaces the existing sales and service tax.

Hasan said the government would ensure that the public understood the facets of the new taxation system despite some irresponsible groups trying to take advantage by confusing them about it.

On the implementation of GST, he said it would depend on Najib as the finance minister to decide whether the country's economy was stable and the government was prepared in terms of administration.

"It all depends on the economic situation and the readiness of the government's administration. It could be pushed forward or delayed, but our target is still April 1 next year."

He was commenting on Deputy Minister in the Prime Minister's Department Datuk Razali Ibrahim's statement on Saturday that GST might be delayed if the situation was not conducive.

Deputy Finance Minister Datuk Ahmad Maslan said 330 speakers had been trained to help the government explain the GST.

Customs dept to intensify GST information drive

17 April 2014| last updated at 03:27PM

PUTRAJAYA: The Customs Department will intensify its information drive on the Goods and Services Tax (GST), including using the social media, so that the public will understand and accept the implementation of GST, scheduled from April, 2015.

Its director-general Datuk Seri Khazali Ahmad said various programmes would be carried out, such as premier public talks at the state level to explain the GST to all levels of society.

"We have written to all the state secretaries for the 'ceramah perdana' to be held in their respective states. Twenty to 30 such public talks are expected to be conducted to explain and disseminate information on the importance and advantages of the GST to the masses.

"The programme is also to allay doubts and fears over the GST so as to ensure its smooth implementation in generating economic wealth for the country and people on the whole," he said after a talk on the GST at the Putrajaya International Convention Centre, here, today.

Khazali said in explaining the GST right down to the grassroots, the Customs Department would also hold various programmes at the district level.

About 2,000 civil servants attended today's talk on GST which was opened by Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

Also present were Deputy Finance Minister Datuk Ahmad Maslan and Treasury secretary-general Tan Sri Dr Mohd Irwan Siregar Abdullah.

To expand the GST information drive, Khazali said the Customs Department would be using the social media to connect with the Y generation.

"To create better understanding on the implementation of the GST, a very important aspect is increasing training and publicity in order to reach all levels of society."

He said in this regard, the Customs Department and Finance Ministry already had and was carrying on a series of publicity and training programmes such as public consultations, visits to the industries and tax consultations with the relevant parties like the Malaysian Institute of Taxation.-- BERNAMA

Read more: Customs dept to intensify GST information drive - Latest - New Straits Times http://www.nst.com.my/latest/customs-dept-to-intensify-gst-information-drive-1.570830#ixzz2z8pvzk3Y

'Economic push crucial'

Publication: NST

Date of publication: Apr 16, 2014

Section heading: Main Section

Page number: 002

Byline / Author: By Zulita Mustafa

PUTRAJAYA: THE economic transformation programme must continue to spur the growth of the country's economy, said Datuk Seri Najib Razak.

The prime minister said measures such as fiscal consolidation and subsidy rationalisation, including the introduction of the Goods and Services Tax (GST), should be carried out systematically and in a prudent manner so that the people would not be burdened.

"Any indication that the process will slow down or be reviewed will give out negative signals about the economy.

"We must carry out these measures to strengthen the country's financial position," he said at the Finance Ministry's monthly gathering here yesterday.

Present was Deputy Finance Minister Datuk Ahmad Maslan.

Najib, who is also finance minister, said these fundamentals showed the government's determination and commitment, which would be positively evaluated and rated by international ratings agencies and other countries.

"I believe this is also the best way to show our ability to compete with other countries and to achieve moderately high economic growth. If there is no economic growth, our burden will get heavier.

"Whatever we want to carry out, including fiscal consolidation, will be very taxing without encouraging economic growth. This is (the reason behind) our commitment to attain more or less five per cent (economic growth).

"Last year, we recorded a gross domestic product growth of 4.7 per cent, and this year, God willing, we can achieve higher growth."

Najib said the government could not always depend on popular policies.

"The GST, for example, is very good for any economy. We all know the way forward is via the GST, which can determine the country's future and prosperity."

However, he said, there were still groups, which, to get political mileage, opposed its implementation, although the GST was for the benefit of the people.

Najib said the government admitted that costs could rise in the first year of implementation, but it would be a one-off hike.

"We have measures (in place) to ensure that it will not be a burden to the people. What is important is that the country's financial standing will be strong."

He said the International Monetary Fund had recently stated that even though the world economy was recovering, the rate of recovery was too slow.

Meanwhile, Bernama reported that Najib received a courtesy call from Sri Lankan Defence Secretary Gotabaya Rajapaksa at his office here yesterday.

Rajapaksa and his delegation arrived at 5.35pm and the meeting lasted about 30 minutes.

Later, Najib received a courtesy call from the United Kingdom Defence Department delegation, which was led by UK Parliament Under-Secretary of State and Defence Equipment, Support and Technology Minister Philip Dunne.

Rajapaksa and Dunne were in the country to attend the 14th Defence Services Asia 2014 Exhibition at the Putra World Trade Centre in Kuala Lumpur.

Dewan Rakyat adjourns on high note

Publication: NST

Date of publication: Apr 12, 2014

Section heading: Main Section

Page number: 019

Byline / Author: By Hana Naz Harun

KUALA LUMPUR: THE Dewan Rakyat adjourned sine die on Thursday, after sitting for 20 days beginning March 10.

The House began its first meeting of the second session in a sombre mood, observing a moment of silence for the passengers and crew on board the missing Malaysia Airlines jetliner.

Prime Minister Datuk Seri Najib Razak also tabled a special motion to express sadness, sorrow and grief over the incident and recorded condolences to all the families and friends of those aboard the flight.

Despite the sombre start, the sitting proved fruitful as four bills - the Judges Remuneration (Amendment) Bill 2013, the Corrosive and Explosive Substances and Offensive Weapons (Amendment) Bill 2013, the Supplementary Supply (2013) Bill 2014 and the heavily debated Goods and Services Tax (GST) Bill 2014 - were approved.

The GST Bill was tabled on March 30 for the first time in six months after its announcement by Prime Minister Datuk Seri Najib Razak during the 2014 Budget.

After immense discussions and arguments, the GST bill was passed through two bloc division votes on Monday.

In the first bloc voting, 118 members of parliament voted in support and 81 voted against. The opposition requested for another bloc vote after no debate was held at the committee stage.

While votes were tallied, Pakatan MPs rolled out black Anti-GST banners, causing a commotion from the other side of the bench and amusing others, including Speaker Tan Sri Pandikar Amin Mulia, who took pictures of the scene. The bill was passed after a final head count of 119 versus 81.

Throughout the final two weeks of the sitting, opposition MPs (Gelang Patah's Lim Kit Siang, in particular) were adamant about a "special MH370 briefing", and calling for press conferences time and again over the same issue.

Almost every evening, Arau MP and Minister in the Prime Minister's Department Datuk Seri Shahidan Kassim would speak out against the idea, and on Wednesday told the opposition once again not to take the opportunity to politicise the incident.

"The government has nothing to hide. He (Lim) politicises anything that we say," Shahidan reiterated.

The final day proved to be the most entertaining for journalists, with the ejection of two Pakatan lawmakers.

Azmin Ali (PKR-Gombak) was pressing for his motion on the conduct of three Court of Appeal judges in Datuk Seri Anwar Ibrahim's sodomy acquittal to be debated. A heated argument between Azmin and Pandikar ensued after the latter disregarded his request, causing a commotion in the House.

Hanipa Maidin (Pas-Sepang), who tried to raise another issue in the midst of the clamour, also got booted out, resulting in Pakatan MPs staging a walkout.

As the sitting continued after lunch, the two were allowed back into the House, with Datuk Bung Mokhtar Radin (BN-Kinabatangan) saying: "Kalau begitu, kita telefon dia masuk (If so, let's give them a call)."

The highlight of the day - at least for Bung Mokhtar - was Teresa Kok's (DAP-Seputeh) red ensemble. He said Kok did not adhere to Parliament's dress code and asked Deputy Speaker Datuk Ismail Mohamed Said to reprimand her and argued that what she was wearing was "inappropriate".

Barely tickled at his statement, Kok then asked, "What is wrong with what I'm wearing?"

Later that day, Kok, in her blog posting said she asked photographers to take her picture. "Tengok!! Apa salahnya baju saya? Tak cantik ke? (Look! What is wrong with my outfit? Not pretty, is it?)," she asked.