Malaysia: GST Bill tabled, fierce debates expected

John Penn SG

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

angel7030 SG

Wow, finally, they followed us.

BJK SG

No, Malaysian’s proposal GST does not include basic essential items such as rice, sugar, cooking oil ,etc just like Japan and other countries. But Sg GST includes every purchase even to bury the dead.

Smokingman SG

Our GST is mainly to help the poor...so must tax every damn thing.

John Penn SG

must all tax, otherwise PR, FT or Foreigners all make noise what

later, all returned

this is type of issue cannot be so frank

so must come up with excuses

John Penn SG

malaysia, they have natural resources, plantation, etc

so still can tahan what

John Penn SG

Malaysia’s GST: Not relief but heavier burden expected

December 17, 2009

By S Pamawathy from Malaysiakini

The people will have to bear an additional tax burden of RM6.4 billion under the Goods and Services Tax (GST) once it comes into force next year, said the Pakatan Rakyat Anti-GST task force.

Parliamentarians Tony Pua (DAP-Petaling Jaya Utara), Saifuddin Nasition (PKR-Machang), and Dzulkifly Ahmad (PAS-Kuala Selangor) were commenting on the controversial bill tabled for first reading yesterday.

They have been steadfast in their stand that a tax system that is introduced across the board, be it three, four or even eight percent, will be a burden to lower income and middle income Malaysians.

The finance ministry is presently looking into introducing GST at a rate of four percent to replace the already existing Sales and Services Tax (SST). It is expected to be finalised once Parliament passes the bill.

Yesterday, Finance Minister II Ahmad Husni Hanadzlah had said that the government is estimating an additional RM1 billion in revenue annually after the first year of its introduction.

The tax is aimed at reducing the government’s dependance on revenues from state oil giant Petronas which accounts for over 40 percent of the country’s revenue.

According to Ahmad Husni, GST will also see businesses save RM4 billion while exporters would be able to save up to RM1.4 billion under the ‘zero-rate’ system.

Finance minister’s statement does not make sense

Pua, however, said that the minister’s statement “does not make sense just as money does not grow on trees”.

“This is brilliant legislation, a tax legislation where no one has to pay more,” he said sarcastically.

“If businesses reduce tax contribution by RM5.4 billion as stated by the Finance Minister II, while at the same time boost the collection of GST to more than RM13 billion, it can only mean that the additional RM6.4 billion must be collected from the rakyat,” said Pua (right).

“The question then is, how is it that the minister can come up with figures whereby both the lowest income group as well as the highest income group enjoy savings?

“The savings, which will exceed RM6.4 billion for businesses, are inevitably shifted to consumers, regardless of whether they are low wage workers, retirees, students or your average man on the street,” he added.

Asked about the RM22 million Budget 2010 has dedicated for the study of the GST bill, Pua only said: “I don’t know… maybe they have already paid the consultant and completed the study, before even the Budget was passed.”

Saifuddin told reporters that the Pakatan GST team will undertake measures to raise the awareness of the people as well as draw feedback from academics and industry experts on the bill through roundtable discussions and forums.

According to Saifuddin, they also plan to form a parliamentary caucus on the GST. – Malaysiakini

charlize SG

Robust debates over increasing GST will never occur in sg.

That's because according to media reports, singaporeans generally welcome price increases.

sbst275 SG

how essential items not going to be GST taxed is something in content unless you've good and standardised POS system

but some items end up need to be GST taxed in order to claim

likeyou SG

Another source of income for malaysian govt.

Rooney9 SG

why dun Msia asks Spore a thing or two on GST. after all GST has been in Singapore for almost 2 decades. they can also ask Spore how to increase GST incrementally.

likeyou SG

why dun Msia asks Spore a thing or two on GST. after all GST has been in Singapore for almost 2 decades. they can also ask Spore how to increase GST incrementally.

Probably they want face lah.

I-like-flings(m) SG

in HK they even debate till proposal for GST was rejected....