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Sunday, April 19, 2015

Confusion over GST – Lim Sue Goan

Image result for harga barang naik lepas GST

Due to poor management before and after the implementation of GST, chaos still rules more than two weeks into its implementation.
In the first place, the execution efficiency of government bureaucracy is anything but desirable, adding to the plight of widening wealth gap in the country.
Moreover, the GST-exempt list is way too long for local businesses to keep up.
First and foremost, GST has triggered a fierce round of price hikes.
When Deputy Finance Minister Datuk Ahmad Maslan said last May that only 10% of goods would be more expensive after the implementation of GST, while prices for 48% of goods would remain unchanged and 42% would become cheaper.
He said again this January that the government expected 54% of goods to become cheaper. None of these predictions has materialised.
According to a Fomca survey, prices of some of the goods are 20-30% higher than the government's "reference prices".
A small plate of clams should sell at RM3, but even half a plate now goes for RM7.50! The price of curry fish head has gone up by more than 100% from RM35 to RM80 now.
Many hawkers have upped their prices because of rising cost, their margins far more than 6%.
The government has thought the introduction of 6% GST in the place of 10% sales tax should bring prices lower by 4%.
The reality is, many SMEs have not applied for sales tax refund owing to the complicated procedures, thus transferring the overhead to consumers.
Even electrical appliances that are supposed to be cheaper are more expensive now.
There are indeed certain goods that are cheaper such as cars, but how often does a driver change his car?
Prices of many things have gone up by 20-30%, and if the prices do not go down within three months, the lower income group will suffer and this could potentially spark social problems.
Secondly, consumer sentiment has taken a beating due to the current chaos, while weak domestic demand dampened the national economy.
The current chaos could be attributed to the lack of preparedness on the part of the government as well as lack of comprehensive understanding of GST.
For instance, the issue over 6% GST for prepaid cards has caused much confusion such that many operators would boycott its sale.
Then we have 10% service charge imposed by hotels and F&B outlets, which has been going on for so long without much dispute until GST stepped in.
The government has intended to do away with the 10% service charge but given the fact that the average monthly salary for more than 100,000 waiters in the country is a paltry RM350 to RM1,200, the government also has the obligation to take care of their well-being.
The ambiguous claim that consumers can refuse to pay service charge if they are not happy with the service tendered has put restaurateurs in a dilemma.
Sin Chew Daily has received more than a dozen e-mails each day from the readers querying about GST, and this shows many businesses have been helpless getting clarification from government officials.
The government has intended to increase the tax revenue by RM22 billion from GST, but if the current confusion is not dispelled and consumer sentiment not restored, it won't be easy to achieve the desired revenue target.
Moreover, thanks to lax supervision, we cannot rule out the possibility of over claim of input tax credit.
If the government bows to the demands of Cuepacs to significantly increase salaries and benefits of civil servants in the country, the imposition of GST will become meaningless.
As a matter of fact, the near-term effect of GST is anything but optimistic.
The drastically falling ringgit fails to boost our exports. Total export for February this year was 9.7% lower year-on-year, and as such we will need to turn to domestic demand to grow the economy.
Many are concerned the recently introduced GST would further dampen demand.
Thanks to GST, all Malaysians are now contributing to the government's tax revenue.
It will come down to the government, how it is going to make use of the additional tax revenue to benefit the rakyat.
It is yet to be seen whether the voters in Permatang Pauh and Rompin view GST positively, but one thing for sure, GST is here to move the politics of this country. – Mysinchew.com

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