KUALA LUMPUR: The Royal Malaysian Customs Department has insisted that no complication would arise from the April rollout of the new Goods and Services Tax System (GST), dismissing warnings that major administrative problems could spark confusion or lead to wrongful profiteering among businesses.
Instead, department Director-General Datuk Seri Khazali Ahmad expressed confidence that the ongoing media blitz to educate businesses on the GST would suffice to help operations even small-scale businesses like sundry shops to administer the new system.
“There will be no confusion, we have been on a campaign to educate these businesses about GST so they can’t just simply add charge people more,” he told.
A tax expert had warned two days ago that the GST’s flat six per cent rate has likely discouraged small businesses from registering for the consumption tax, which could lead to low understanding of the new system and push them to add an additional six per cent charge on items.
Dr Veerinderjeet Singh, chairman of tax advisory firm Taxand Malaysia, had warned of possible complications arising from the new tax because Malaysia has a far longer list of exemptions and zero-rated goods compared to countries like Singapore and Australia.
Due to the various exemptions and zero-rated goods, traders would find it difficult to set the final price of their product.
“Many are not going to do a detailed analysis. They’ll just sell at the same price and add six per cent,” said the tax expert.
Khazali admitted, however, that not all small businesses have registered for the consumption tax or attended the Customs briefing on the matter, but insisted that there should not be any confusion over the matter since the authorities have done much to educate them.
Veerinderjeet had said many businesses such as small, family-run shops and medium-sized grocery stores in small towns outside the Klang Valley probably failed to register with the Customs Department for the GST by the December 31, 2014 deadline because of the mistaken belief that the tax did not apply to them.
According to the tax expert, it is compulsory for businesses with annual sales of above RM500,000 to register for the GST.
Khazali, however, said the chances of hiccups in the GST among small businesses was highly unlikely due to the limited list of items sold at these shops.
“You can immediately identify them and you can easily check the new prices or which items have been zero-rated,” he said.
He added that inventories in sundry shops were far smaller than bigger companies like Tesco or Giant, but these companies are likely able to purchase a GST-pricing software designed by the Customs and download it into their network system to smoothen operations.
