SMEs will benefit greatly, says KCCCI

KLANG: Small and mediumsized enterprises (SMEs) will benefit greatly from the scrapping of the Goods and Services tax (GST).

“Domestic businesses will do better because without GST, the cash for input and output taxes can be utilised as working capital,” said Klang Chinese Chamber of Commerce and Industry ( KCCCI) president Tan Sri Lim Kuang Sia.

(Output tax is GST on products sold by merchants, while input tax refers to the GST incurred by merchants for their operating costs.)

Lim, who is the founder, managing director and chief executive officer of Kossan Rubber Industries, said the abolition of GST would strengthen and enhance the SMEs’ cashflow.

Most importantly, he added, the buying power among the people would increase, which would benefit domestic consumerbased businesses.

“Business will be better in terms of local consumption, as products sold to end users will be cheaper as opposed to with GST, whereby the cost multiplies before it reaches the end user,” said Lim.

However, the removal of the GST has little impact on big businesses which are exportbased, he said.

On bringing back the Sales and Services Tax (SST), Lim said he believed there may be some modification before implementation.

He said the SST previously used was introduced many years ago and needed upgrading.

Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry (KLSICCI) Klang district chairman N.P. Raman said businesses and consumers were waiting for Friday, when the GST would be scrapped.

“People are not buying much now, as they know prices of goods will be lower from June 1,” said Raman, who owns a goldsmith outlet.

He said he expected the number of people buying jewellery to increase as well when the GST was done away with.

“For example, if someone buys a gold item costing RM5,000 now, he or she would have to top up another RM300 for GST. That is a lot of money,” said Raman.