The Federation of Malaysian Manufacturers (FMM) welcomes the government’s call to reintroduce the goods and services tax (GST) at a rate that will not burden the rakyat but still help widen the government’s revenue base. Earlier this week, prime minister Datuk Seri Ismail Sabri Yaakob said the country was deliberating the move, which would expand its revenue base and help relieve the heavy financial burden the government was facing.
In a statement issued today, FMM said that GST is a more transparent and effective tax regime compared to the sales and services tax (SST), which it replaced in April 2015. The GST didn’t last long, being abolished in favour of SST once again in September 2018 when Pakatan Harapan came into power.
According to FMM president Tan Sri Soh Thian Lai, a survey carried out two years ago by the federation on the possible reintroduction of GST showed that its members were favourable to such a move. “A total of 499 companies which responded to the survey strongly supported GST replacing SST,” he said.
This, Soh said, was because GST provides a fairer tax structure and eliminates cascading and compounding of taxes commonly found in the SST regime. He added that Malaysian exports would also become more competitive on the global stage as no GST is imposed on exported goods and services, while GST incurred on inputs can be recovered along the supply chain.
Soh said as the broad tax base system would increase indirect taxes, it would offer flexibility to the government to reduce direct taxes – such as personal income tax and corporate tax – to make Malaysia a more attractive business destination.
However, he called on the government to consult all stakeholders for a thorough review process to ensure the success of introducing an effective tax regime. This includes having an adequate allowance for the change to be made smoothly.
“While switching back to the previous automated model under the GST tax payers access point (TAP) system will not be difficult as GST compliance systems are already in place, companies have asked for a six-month transition period to change from SST to GST, based on our May 2020 survey,” he said.
Soh also suggested that the implementation of the GST be done at a 4% rate (compared to 6% previously). Doing so would boost conducive business conditions, leading to higher investments and employment opportunities, he said. The proposed rate would also provide higher disposable income for the rakyat.
He added that the government should also zero-rate all essential goods and services, maintain the GST registration threshold at RM500,000 and minimise delay in refunds, especially for exporters and businesses with zero-rated supplies. Lastly, he said that it was important to ensure that a proper mechanism is in place to monitor price control and anti-profiteering in the market when the tax system is reintroduced.
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We only want GST @0%
To make sure won’t do the same issues again for the first time when gst was implemented, take a look this link:
https://www.theedgemarkets.com/article/gst-reintroduction-needs-be-implemented-targeted-way-says-subromaniam
I also suggest that those important items like food and drinks should also not include with GST
Najib ran away from paying RM 1,690,000,000.00 Biliyun of taxes. So no problem.
Funny as they were one of the many that whack GST 1.0 back then but after tasting the benefits of such a system now they support it? Hahaha
more pipu realise the benefits of gst. u dun want pipu to join ur side?
Don’t forget how GST refund account was abused to pay 1mdbee debt.
no different! Last time was 6%. But out of control. For example, restaurants that wr visited daily simply increase their prices more than 6%. No control at all!
So did you still visit that restaurant after return back to SST?
Non essential n essential items price r skyrocketing n stil wan to add on 4 to 6% on the overall bill, who gain the most ?
Current SST how many percent ?
When replaced with GST how many percent ?
I wonder why. Didn’t Pakatan said reversion of GST back SST will reduce prices but so far prices have been going up.
when the current gov failed so badly they only know how to blame here blame there
I’m okay between 3% – 4% but as long as not to make any burdence like GST 1.0 that implemented in 2015
no, the rakyat dont want GST OR SST
You say rakyat don’t want GST or SST, but the government still also need to pay with SST or GST. It is impossible that must not be without GST or SST.
hello? corporate tax? income tax? gst and sst to fund dear leaders Audemars Piguet ah
Still, government needs money from SST or GST to protect for our rakyat
protect themselves from a riot?
No. The government will protect poor people and everyone not the riots
The government must also make sure to make things correctly done for ringgit against foreign exchange including US dollars, not making any troubles like previously happening for GST 1.0 2015 with the tax rate of 6%
I am still apolitical. I have fully supported GST as it is transparent (you will know GST input into the purchase and selling and the differences they make so LHDN will know now much one is making the profit). The higher revenue collected is for the nation and for rakyat finally. But sadly, it was politicised by DAP and its stooges mainly to protect their SME shadow business partners. Damn to them.
GST is good for country income that used for development. But here, money collected goes to certain people pocket and use to subsidize lazy people. People work hard climb to T20 and pay more tax but wants to cut their petrol subsidiary while continue to subsidize the lazy people that do not want to work hard to get what they want.
Refer to the operators that hired in my factory that with aircond in production. Some work even one day then disappear, commented tired. Ok, fine, let them sit in the aircond office but do they able to perform?
deyh, some people because of surroundings they cannot climb up ladder lah dey, pity them. Sometimes they cannot high position because of background lah