Malaysia: GST Bill tabled, fierce debates expected
December 16, 2009
By Syed Jaymal Zahiid from The Malaysian
Insider
The government today tabled a law to introduce a controversial
Goods and Services Tax (GST) which it says is necessary to broaden
the tax base but the opposition claims will be a burden on ordinary
Malaysians.
Under the proposal, the government is looking at a GST rate of
four per cent.
The GST will be replacing the current Sales and Services Tax
(SST) system which the government claims is costing businesses and
consumers more.
Finance Minister II Datuk Seri Ahmad Husni Hanadzlah later told
reporters the government is estimating an increase of RM1 billion
in tax collection or RM13 billion in total in the first year of the
tax system’s implementation.
The SST had only managed to rake in RM12 billion and has also
proven to have “inherent weaknesses”, Husni added.
The replacement of the SST with the GST will also see businesses
save RM4 billion from GST while exporters, RM1.4 billion, he
claimed.
The GST’s implementation will not be a stroll in the park for
the government as it expects to face fierce opposition from
political rivals who are already campaigning against its
implementation.
Pakatan Rakyat has already set up an anti-GST task force which
claims the implementation — when income growth has been stagnant —
will only burden the electorate.
Husni, however, said there was no need for voters to worry about
its implementation as the GST will exempt taxation on basic
products like rice, vegetables, sugar, flour, cooking oil, fish,
beef and chicken.
“Also small and medium enterprises with revenue below RM500,000
will be exempted from the GST,” he Husni.
Debate on the Bill will proceed in March next year. The
government is expected to go on a major exercise next week to
campaign for GST by explaining to the public the rationale for
introducing the new tax.
The tabling of the GST Bill, however, did not proceed smoothly
as Pakatan Rakyat (PR) lawmakers, who are opposed to its
implementation, tried their best to delay proceedings.
Teluk Intan DAP parliamentarian M. Manogaran stood to object,
saying that there were many other Bills left unresolved but his
objection was shot down by Deputy Speaker Datuk Wan Junaidi Wan
Jaafar.
The government plans to fully implement the GST in mid-2011. –
The Malaysian Insider
