PUTRAJAYA, Aug 7, 2014:
The implementation of the goods and services tax (GST) in April next year will not burden the rural folks, especially in Sabah and Sarawak, as they could enjoy cheaper goods and services, said a tax consultant.
Executive director of Tax Advisory and Management Sdn Bhd, Yong Poh Chye, said essential goods, such as agriculture, food, livestock, poultry, public transportation, land, funeral package, private health and education, were zero-rated and not subjected to GST.
At present, he said, the items were subjected 10% sales tax and 6% services tax. They would be reduced to only 6% after the implementation of GST, he said.
“The prices of goods and services will automatically go down by at least4%.”
Yong said the implementation of GST would prevent double taxation as only the value added at each stage would be taxed.
“No matter how many stages a good and service go through the supply chain, the input tax incurred at the previous stage will be deducted at the next stage in the supply chain.”
He said the implementation of GST would also enable the government to increase the allocation for rural development as the GST would bring in additional income.
Yong said to prevent unscrupulous traders from increasing the prices of goods, the Ministry of Domestic Trade, Cooperation and Consumerism would place over 500 enforcement officers at the 222 parliamentary constituencies for monitoring.
“Traders must not use the GST as an excuse to increase the prices of the goods. Stern actions will be taken against them after the implementation of GST under the Price Control and Profiteering Act 2011.”
He said over 10,000 products would be monitored in each constituency.
Prime Minister Datuk Seri Najib Razak, who is also the finance minister, announced the implementation of the GST at 6% to replace the sales and service tax when tabling Budget 2014.
GST will help Malaysia achieve a surplus budget by 2020 as the government is expected to collect RM23.1 billion in tax revenue next year and RM32 billion of GST revenue in 2016.
At present, 160 countries have implemented GST, including seven Asean members. Indonesia was the first, followed by the Philippines (1988), Thailand (1992), Singapore (1994), Vietnam (1999), Cambodia (1999) and Laos (2009).
With the exception of Singapore, which initially imposed the tax at 3%, the six other countries started at 10%.