‘Ensure clear timeframe for change from GST to SST’

Reports by HEMANANTHANI SIVANANDAM, LOSHANA K. SHAGAR, RAHIMY RAHIM, CAVINA LIM, INTAN AMALINA, WANI MUTHIAH, R.S.N. MURALI and STEPHANIE LEE

PETALING JAYA: Authorities must have a clear timeframe to enforce the change from the Goods and Services Tax (GST) to the Sales and Services Tax (SST).

Federation of Malaysian Manufacturers ( FMM) president Datuk Soh Thian Lai said this was to ensure that all necessary regulations and procedures were in place.

He noted that the pre2015 SST model had a range of rates, including sales tax at 0%, 5% or 10%, as well as a 6% service tax.

There was also a charge of RM50 and RM25 on principal credit cards and supplementary cards, he said.

“The complex tax model presents an administrative burden to manufacturers and may also result in businesses evading registration to avoid the administrative burden.

“We suggest that the Government adopt a single low and broad uniform rate for the new tax to ease the administrative burden of companies.

“This would allow the Finance Ministry and Customs Department to effectively enforce the new tax regime,” he added.

Soh said the ministry and Cus toms should monitor software vendors to ensure they did not profiteer excessively from the reintroduction of SST.

“We need to know if there will be similar harsh penalties under the new tax regime as it could debilitate business development, especially during the transition period.

“We hope these penalties can be waived for a period of 24 months from the date of SST implementation to help companies transition to the new tax system,” he said.

Malaysian Retail Chain Association president Datuk Gary Chua said retailers would comply with the Government’s zerorated GST ruling.

“Prices will generally be lowered, but the quantum will vary depending on the industries. Most importantly, the price adjustment must be done accordingly by the manufacturers, importers and suppliers before retailers can pass on the benefits to the end consumers,” he said.

He noted that some retailers had even offered the 6% GST discount before June 1 to drive sales ahead and to add value to consumers.

SME Association of Malaysia president Datuk Michael Kang said GST on any stock bought by businesses before June 1 could not be passed down to consumers after that date, as it was recoverable under the input tax credit claims.

“However, on the change in the point of sale (POS) system to adapt to the SST again, we will submit a proposal to the relevant authorities to help minimise the cost of change,” he said.

He noted that it had cost between RM3,000 and RM20,000 for businesses to change their POS system to include the GST when it was introduced in 2015.