KUALA LUMPUR – The Goods and Services Tax (GST) would not be the only factor affecting price movements when it is implemented in April next year, Deputy Finance Minister Datuk Chua Tee Yong said.
He said price movements were prompted by a combination of factors, including foreign exchange rates, cost of services, and supply and demand, apart from taxes.
“All these factors play a role in setting the prices. With or without the GST, there will be inflation and price movements,” he told reporters after the launch of a seminar on the GST implementation and its impact on the tourism industry here today.
The two-day seminar is organised by the Malaysian Association of Tour and Travel Agents (MATTA).
Asserting the need for the country to implement the GST to remain competitive in exports, he said, “In Asean, Thailand and Indonesia’s exports are GST-free. In Malaysia, we still have the sales and service tax, for which exporters could not claim from the government.
“With the GST, this will be removed. This is important because businesses cannot survive from domestic demand alone as we don’t have a huge population base,” said Chua.
On GST registration, he said so far 42,000 companies had complied with the requirement with between 1,000 and 1,500 business registering daily, peaking at 3,000 registrations yesterday.
“If we were to maintain this trend, we would be able to get 200,000 companies registered by year-end,” he added.
Earlier, in his speech, Chua urged MATTA to submit a paper on the probable impact of the GST on the tourism industry to the Finance Ministry for scrutiny.
The Finance Ministry wants the GST to be an equitable tax system that will have a win-win structure between the public sector and the private sector, including the tour and travel sector, he said.
In 2013, Malaysia registered 25.72 million tourist arrivals, generating tourism receipts of RM65.44 billion.
Tourism Malaysia is confident of achieving its target of 36 million tourist arrivals and generating an income of RM168 billion by 2020. – BERNAMA