KUALA LUMPUR: The government intends to begin collecting the goods and services tax at four percent in the middle of 2011, Second Finance Minister Ahmad Husni Hanadzlah said today.
This would give all parties 18 months to get ready for the implementation, he told reporters at the lobby of Parliament House after tabling the Goods and Services Tax Bill (GST) 2009 for first reading in the Dewan Rakyat.
Several groups have voiced their opposition to the GST for fear it will raise the cost of living. The Federation of Malaysian Consumers Association (Fomca), while acknowledging the benefits of the tax, has suggested that it be phased in, beginning at a rate lower than four percent, so that the inflationary effects would not be too oppressive.
The bill, tabled for first reading by Second Finance Minister Ahmad Husni Hanadzlah, will replace the sale tax and the service tax currently imposed and collected under the Sales Tax Act 1972 and the Service Tax Act 1975.
The GST is a broad-based consumption tax based on a value-added concept.
Unlike the present sales tax, which is a single stage tax, the GST is a multi-stage tax.
Payment of tax will be made in stages by the intermediaries in the production and distribution process, according to Bernama.
The tax itself is not a cost to the intermediaries and does not appear as an expense item in their financial statements.
GST covers all sectors of the industry and is a tax on final consumption of goods and services.
It is collected through a credit system by which GST incurred on inputs is offset against GST charged on outputs.
Ahmad Husni described the GST as an efficient tax system and said it would replace the current consumption tax in the form of sales tax and service tax.
With the GST, the government would make RM13 billion in the first year, he said
He also said that businesses would save RM4.1 billion in taxes and the export sector would save RM1.4 billion.
“The government’s main purpose in introducing the GST is to make the taxation system more comprehensive, efficient, effective, transparent and business friendly,” he said.
He said businesses were expected to benefit because the cost of doing business would be lower.
The government is proposing to impose the GST at a rate which is lower than the sales tax and service tax rates and to allow certain exemptions, especially on essential goods, he said. These would include agricultural products like padi and vegetables, basic foods like rice, sugar, flour and cooking oil) and fish, beef and chicken, he added.
Ahmad Husni also said companies with yearly revenues of RM500,000 and less would be exempted.
The second and subsequent readings of the bill would be done during the sitting of the Dewan Rakyat next year, scheduled for March.
Ahmad Husni said this was to give the opportunity for everyone to scrutinise the bill to provide feedback.
FMT
16/12/09
Several groups have voiced their opposition to the GST for fear it will raise the cost of living. The Federation of Malaysian Consumers Association (Fomca), while acknowledging the benefits of the tax, has suggested that it be phased in, beginning at a rate lower than four percent, so that the inflationary effects would not be too oppressive.
The bill, tabled for first reading by Second Finance Minister Ahmad Husni Hanadzlah, will replace the sale tax and the service tax currently imposed and collected under the Sales Tax Act 1972 and the Service Tax Act 1975.
The GST is a broad-based consumption tax based on a value-added concept.
Unlike the present sales tax, which is a single stage tax, the GST is a multi-stage tax.
Payment of tax will be made in stages by the intermediaries in the production and distribution process, according to Bernama.
The tax itself is not a cost to the intermediaries and does not appear as an expense item in their financial statements.
GST covers all sectors of the industry and is a tax on final consumption of goods and services.
It is collected through a credit system by which GST incurred on inputs is offset against GST charged on outputs.
Ahmad Husni described the GST as an efficient tax system and said it would replace the current consumption tax in the form of sales tax and service tax.
With the GST, the government would make RM13 billion in the first year, he said
He also said that businesses would save RM4.1 billion in taxes and the export sector would save RM1.4 billion.
“The government’s main purpose in introducing the GST is to make the taxation system more comprehensive, efficient, effective, transparent and business friendly,” he said.
He said businesses were expected to benefit because the cost of doing business would be lower.
The government is proposing to impose the GST at a rate which is lower than the sales tax and service tax rates and to allow certain exemptions, especially on essential goods, he said. These would include agricultural products like padi and vegetables, basic foods like rice, sugar, flour and cooking oil) and fish, beef and chicken, he added.
Ahmad Husni also said companies with yearly revenues of RM500,000 and less would be exempted.
The second and subsequent readings of the bill would be done during the sitting of the Dewan Rakyat next year, scheduled for March.
Ahmad Husni said this was to give the opportunity for everyone to scrutinise the bill to provide feedback.
FMT
16/12/09
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