The goods and services taxes has been “misunderstood” by the public, a tax expert said today, stressing that there was a need to relook the controversial system now that polls were over.
“All countries in Asia have implemented the GST except Myanmar and Malaysia. This is not a good comparison for us to make,” said Jennifer Chang, senior executive of PricewaterhouseCoopers Tax Services at the Perdana Leadership Foundation CEO Forum 2013.
Chang said the GST was the only way in which the government could ensure all its citizens paid taxes evenly.
“Only one million out of 29 million Malaysians pay taxes now. All those people driving the big, beautiful cars – some of them are probably evading taxes, and the GST is the most efficient way of collecting the taxes from them.”
But she said the government had failed to “market” the GST effectively enough to the people, and this was why it had dragged its feet in the implementation.
“The problem of not implementing it faster was because of the general election. In Australia, after the government implemented the GST, they lost the election,” she said, to laughs from the audience.
But now that the polls were over, the time was ripe to talk about the GST seriously, she said.
“GST has been misunderstood by the public, and we need to properly market these taxes so that the public understand what it is all about,” said Chang.
She rubbished the misconception that the price of goods would increase dramatically in the wake of the GST, saying that common goods such as milk would be exempted from the tax.
“This tax exemption will ensure it doesn’t hurt the common person so much,” she said.
-FMT
Tuesday, June 18, 2013
Time to look at GST, says tax expert
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The goods and services tax (GST) should have been implemented earlier to reposition Malaysia back on track towards a stable economic growth.
ReplyDeletePricewaterhouseCoopers Taxation Services Sdn Bhd senior executive director Wan Heng Choon said implementing the GST early will help to reduce uncertainties.
ReplyDelete"Firms are unable to make business decisions and start projects due to uncertainties in the implementation of the GST.
There has been more than sufficient time for the implementation of GST," Wan told Business Times in a phone interview yesterday. "Now is the time to do it."
ReplyDeleteWan forecast the GST will be implemented by as early as the first quarter of 2015.
He was commenting on reports that the government is mulling over the implementation of the GST.
ReplyDeleteSecond Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah said apart from the GST, the government is also looking to review the real property gain tax, subsidies and projects with lower import content.
The GST is a broad-based consumption tax initially scheduled for implementation in the third quarter of 2011 but was postponed following calls for consumers to be educated first on how it works.
ReplyDeleteRAM Holdings group chief executive Dr Yeah Kim Leng said the implementation of the GST is a long-awaited move and the government should strike now while the iron is hot to strengthen its fiscal public finance position.
ReplyDelete"Malaysia must join those 170 other countries that have already implemented this added value tax regime. It is part of the government's fiscal reform to rebalance overall tax efficiency because currently, only 1.2 million Malaysians are registered tax payers."
ReplyDeleteHe said the net benefits far outweigh the costs and that the tax burden should fall equally on all levels of the income group.
ReplyDeleteMeanwhile, Wan dismissed the perception that GST will affect low-income earners as their needs are being addressed by various schemes, such as BR1M2 (1Malaysia People's Aid), whose objective is to help those who require help the most.
Yeah concurred, saying the government has in place compensationary measures to replace the burden of the GST, such as cash handouts for the lower-income group and personal tax reduction for the middle-income class.
ReplyDelete"The compensationary measures will offset the price impact brought about by the GST. However, the government, especially the Finance Ministry, must launch a full-scale educational programme on the GST, said Yeah.
ReplyDeleteHe added that with the removal of the five per cent sales tax and six per cent services tax, prices can even be lowered because with the elimination of taxes, manufacturers will be able to lower the cost of production and get rebates, which in turn translates into savings that will then be passed on to consumers.
ReplyDeleteYeah said contrary to popular belief, the rich will not be better off as the more they consume, the more they will have to pay and the lower-income group will be protected as essential goods such as sugar, flour and rice will not be taxed.
ReplyDeleteHe said Malaysia can learn from the experiences of those countries that have adopted the GST to avoid similar pitfalls.
ReplyDeleteHe said the signs are getting clearer with strong indication that there will be some announcements on GST in the 2014 Budget on October 25 and he expects the GST to be implemented by as early as January 2015.