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27th August, 2010
KUALA LUMPUR: The government has put in place all the necessary structure for the introduction of the Goods and Services Tax (GST), and is “almost ready” although the new tax regime would not be implemented next year.
“We have completed the formulation of the GST model as well as the guides on process and procedures, while the system and development are on final stages,” Deputy Director of the Customs Internal Tax Division, Subromaniam Tholasy said during a dialogue session on GST yesterday.
The government is now actively educating and gathering feedback from the public to provide a clearer picture on GST, Subromaniam said, adding that that was the reason why the government deferred the second reading of the bill.
Subromaniam stated that the GST will be more transparent compared to the current excise tax structure, where the customers are actually burdened with the sales tax and services tax (SST) and do not realise it.
“With the current sales tax and services tax, consumers are charged five per cent and 10 per cent respectively while with the GST they will only be charged four per cent,” he explained.
Citing an example, Subromaniam said people with less than RM3,000 income per month who are not paying income tax, have always been paying SST.
“With SST, they actually have to pay RM79.57 per month while with GST they will only be paying RM70.08 per month.
“And for businesses, they may need to bear start up and compliance costs but it’s not a major concern because of the high threshold,” he said.
To help businesses, the government is considering other incentives for the industry players, he said without elaborating further.
For SMEs, free accounting software may be given, he added.
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