INTERESTING: Ahmad Jil (right) attending the GST Seminar that aims at enhancing awareness and education about GST among all consumers.
GOOD RESPONSE: Some of the 500 participants at the GST Seminar.
KUCHING: Low level of awareness and understanding about the Goods and Services Tax (GST) remains the biggest barrier to successfully implementing the consumption-based tax in Malaysia.
Royal Malaysian Customs deputy state director (Customs and Tax) Ahmad Jil pointed out yesterday that enhancing awareness and education on GST has become a major agenda of the department this year.
“Our responsibility is to prepare the general public, businesses, companies and industries to be GST-ready until the government announces its full implementation,” he said at the GST Seminar held at a leading hotel here.
The two-day seminar was organised by Royal Malaysian Customs Department in collaboration with the State Planning Unit and State Security Council in the Chief Minister’s Department.
The first day of the seminar for consumers sector was attended by some 500 participants comprising heads of departments and agencies from both state and federal governments as well as representatives from the private sector, chambers of commerce, community leaders and non-governmental organisations (NGOs).
“In fact, the government has already decided to implement the GST which was revealed in the 2005 Budget but had to postpone implementation as consumers including the businesses are not ready to accept the GST,” he said.
“This is because many of us know little or nothing about GST – its mechanism and concept including benefits,” he stressed.
As such, Ahmad said it is important for the department to continue public engagement and publicity through seminars such as this to expose, inform and educate all consumers about GST.
“The GST Bill was tabled in Parliament for its first reading on Dec 16, 2009 and with indications in the 2012 Budget and current economic development, its implementation is fast approaching,” he said.
Therefore, Ahmad reiterated that it is the department’s responsibility to disseminate accurate information on GST to ensure all segments of society, particularly the business sector, get full understanding about the tax system and its benefits to fully accept it.
Since 2010, the Sarawak Customs Department has carried out numerous GST awareness and education programmes with consumers and industries.
The seminar will continue today for the industrial sector which is expected to be attended by some 300 participants.
GST is a multi-stage consumption tax levied on goods and services at all levels of business transactions.
More effective, transparent and business friendly, GST will replace the current Sales and Services Tax (SST), not a new tax and consumers will not be paying extra taxes.
It replaces the five per cent to 15 per cent government and service tax.
GST is meant to generate more competition between businesses and increase Malaysia’s economic strength.
In the long run, consumers will benefit from more affordable higher quality goods and services as well as more development and progress within the nation including infrastructure, education, welfare, healthcare, national security and so on.
Benefits for consumers include the possibility of paying less for some goods and services as GST eliminates double taxation under SST.
As for businesses, they can benefit from recovering input tax on raw materials and incurred expenses, thus reducing business costs.
Under the current tax system, some businesses pay multiple taxes and higher levels of tax-on-tax (cascading tax).
Certain basic food and services are not subject to GST for socio-economic objectives.
These include basic food, public transportation, residential accommodation, education, health services and domestic consumption of water supply and electricity up to a certain limit.
The current SST has many inherent weaknesses, making administration difficult while the GST system has in-built mechanism to make the tax administration self-policing and therefore will enhance compliance.