JOHOR BAHRU – The 17-month timeline given to businesses to get ready for the Goods and Services Tax (GST) implementation is reasonable and sufficient, Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said.
Commenting on complaints that the duration is insufficient, he said, “Traders who are still not ready are those who put things off until the last moment or hope that the GST would be called off as it is more difficult not to pay the GST upon its implementation.”
He said the GST would not raise the prices of all goods and services, citing car prices which would be lowered by between two and three per cent as a case in point.
“Proton has lowered its prices by up to RM1,475 for a certain model, while Honda between RM500 and RM2,500,” he said in a Whatsapp message today.
Abdul Wahid the GST would not only increase the government’s revenue, but also would help reduce the fiscal deficit in the march towards a balance budget.
This will enable the government to be able to implement many pending development projects such as roads, bridges, schools, hospitals, and rural clinics, he added.
Abdul Wahid conceded that in any new system implemented, there would be teething problems encountered during the implementation stages.
For enquiries or complaints on the GST, calls can be made to the hotline number 1300888500 (the Customs Department) and 1300886800 (the Domestic Trade, Cooperative and Consumerism Ministry) while information on the GST can be gleaned from the Customs Department’s website, gst.customs.gov.my.
Meanwhile, in a statement, Abdul Wahid said the six per cent GST rate is among the lowest in the world, including Asean, with Singapore and Thailand at seven per cent, Indonesia, Vietnam and Australia capping theirs at 10 per cent, and even the UK at 20 per cent.
He said the average inflation rate this year is expected to be about three per cent, taking into account the effect of the GST by 1.1 per cent – a reasonable rate and among the lowest in the region.
To reduce the impact of rising prices, he said the government had expanded the list of zero-rated GST items, among others, rice, sugar, cooking oil, chicken, meat, fish, medicines, books, RON95 petrol and diesel.
Abdul Wahid said when the GST was presented in the 2014 Budget on Oct 25, 2013, the government also announced measures to neutralise the impact by reducing personal income tax by between one and three per cent, corporate tax from 25 to 24 per cent, and the small and medium enterprise (SME) tax from 20 to 19 per cent.
In fact, to ease the burden of the poor, he said the government had raised the 1Malaysia People’s Aid (BR1M) for households earning below RM3,000 per month from RM500 to RM650 while those in the RM3,000-RM4,000 income bracket were given RM450 for the first time.
He said moreover, in the 2015 Budget, the BR1M payout was raised to RM950 and RM750, respectively while BR1M for single individuals earning RM2,000 and below was increased to RM350.
The GST is not an additional tax, instead it replaces the sales tax at 10 per cent and service tax at six per cent, he said, adding that the GST would widen the tax base as only two million of the 28 million Malaysians are paying tax.
“The GST is a consumption tax as those who spend more are those who earn more. There is no perfect tax system, certainly has its drawbacks,” he said. – BERNAMA