GST supports economy as lower oil prices cast global uncertainties
KUALA LUMPUR : The goods and services tax (GST), which was introduced last year, has been supporting the country’s economy as the fall in crude oil prices cast global uncertainties and threw most economies into turmoil.
The GST has helped Malaysia cope with the loss in its oil revenue.
The tax, implemented on April 1, 2015 at six per cent, targeted to rake in RM39 billion this year, having touched RM30 billion as at October 19, 2016.
The net GST collection from its implementation date to December 31, 2015 was RM27.01 billion.
The GST, despi te it s controversial hesitant start, has successfully waded through so far this year, supported by continuous improvements made by the Royal Malaysian Customs Department to engage with business communities and create awareness among companies to comply with the tax regime.
Tax exper ts are seeing improvements in the submission of GST returns documents by businesses while queries on the tax to the authorities are getting immediate responses throughout the year.
This is a positive sign which reflects the Customs Department’s efficiency and seriousness in engaging with the people and businesses to get them to be more GST- compliant.
GST Partner from Deloitte Tax Services Sdn Bhd, Senthuran Elalingam, said all the parties were exchanging views and understanding each other better.
It will help Malaysian manufacturers and exporters operate more efficiently as the country is now facing competition from other Southeast Asia nations, namely Vietnam and Thailand, where their labour costs are lower. Senthuran Elalingam, GST Partner from Deloitte Tax Services Sdn Bhd
He hailed the government’s decision to combine the special economic zones – free industrial zone and free commercial zone – into a single free zone to enjoy the same benefits, as announced in the 2017 Budget.
Previously, there was confusion of GST exemptions and exclusions from the two special economic zones and the different treatments had made it more complex, resulting in changes to the law and guidance over the past year.
Senthuran said this (measure) would ease the movements of goods as Malaysia was mainly exportoriented, in the manufacturing and trade sectors.
“It wi l l help Malaysian manufacturers and exporters operate more efficiently as the country is now facing competition from other Southeast Asia nations, namely Vietnam and Thailand, where their labour costs are lower,” he said. — Bernama