KUALA LUMPUR: The introduction of the Goods and Services Tax (GST) is timely as it will beef up the country’s finances at a time when slumping oil prices have adversely affected petroleum earnings and dividends.
Prime Minister Datuk Seri Najib Tun Razak said there was no right time to implement the GST yet declining oil prices have somewhat lent support to the government’s move to introduce the new tax regime.
He said the government has been preparing for the GST since the 80’s and it was not a new thing.
“The price of crude oil has fallen, so has the price of petroleum and diesel which has benefited the people.
“So, we have implemented the GST now. From the macro point of view, this is the right time, as the government needs additional source of revenue to offset the shortfall accruing from sliding crude oil prices. So it is an opportune time to introduce the GST now.”
Najib was speaking during a special edition of the ‘Soal Jawab’ programme broadcast last night over TV3 and moderated by Hamdan Ahmir.
He said no other country, except Malaysia, has zero-rated GST on more than 4,000 types of goods and services, including essential products, or exempted them from GST. The prime minister said GST is a replacement of the Sales and Services Tax and not an additional tax as misconstrued by the people.
Besides the GST, Najib said the government has increased the quantum of 1Malaysia People’s Aid (BR1M), reduced personal income tax by between one and three per cent and corporate tax by one per cent.
“So, (this is) the package, if we look at it overall, does not burden the people as we will carry out strict enforcement.
“If there are any complaints, it is not because of the GST itself but because of unscrupulous traders who are irresponsible and took advantage of the situation.”
Najib cited examples of companies such as Giant and Mydin which have maintained prices despite the GST while automotive companies have also brought down prices of various models.
“What we want is for the authorities to take action against irresponsible traders. If an errant trader charges the GST when his business does not attract the new tax, then he must be reported to enforcement agencies.
“Consumers must exercise their right and reject traders who exploit the GST for personal gains,” he added.
The Prime Minister said the people can choose not to patronise these business premises or outlets that have taken advantage of the GST. He urged consumers to report unscrupulous traders to the Domestic Trade and Consumer Affairs Ministry and the Royal Malaysian Customs Department.
“Use your power as consumers, sooner or later, those who are exploiting the situation will lose customers,” he said, adding that the implementation of the GST was part of the government’s tax restructuring exercise to make the tax system more efficient, effective and transparent.
On April 1, Malaysia joined 160 other countries worldwide including seven Asean countries – Indonesia, Philippines, Thailand, Singapore, Vietnam, Cambodia and Laos, in implementing the GST.
At the rate of six per cent, it is the lowest GST rate among Asean countries.
