‘Other mega projects too given tax break’

PUTRAJAYA: The GST relief granted to the East Coast Rail Link (ECRL) project should not be made an issue because this is not the first time mega projects have been given tax break, says Customs director-general Datuk Seri Subromaniam Tholasy.

The SMART tunnel, Bukit Jalil Sports Stadium, KLIA and MRT were among the projects that received relief from Sales and Service Tax and import duties, for example.

“It has never been an issue previously. Why now?

“Please don’t make accusations or spread fake news about this,” he told a press conference at Customs headquarters here yesterday.

“I don’t know if they (the ones making an issue of it) understand tax matters or purposely want to raise these issues to confuse the people. If you don’t understand, come and ask us,” he added.

Subromaniam said the exempted projects were classified as Approved Service Projects, and it was the Finance Ministry’s call to allow the relief on the recommendation of Customs.

The sectors that could get relief were transportation, utilities and telecommunications, and there were various criteria to qualify, he added.

“In general, when relief was given on SST, the Government lost out on tax that would have been collected.

“With GST, the Government does not lose on relief given to businesses because it does not involve the end user,” said Subromaniam.

In the ECRL’s case, he said the Government was the end user because it owned the project through Malaysia Rail Link Sdn Bhd.

“In the end, a Malaysian company gets the benefits, not a Chinese company,” Subromaniam said.

He also clarified that the 6% relief was not on the RM55bil cost of the ECRL but on certain acquisitions, which he said could amount to much less. Furthermore, Malaysia Rail Link would not be allowed to claim any GST refunds.

Subromaniam said that without the GST relief, the Government would have to pay out of its own pocket, raising the project cost.

With GST, the govt does not lose on relief given to businesses because it does not involve the end user. Datuk Seri Subromaniam Tholasy