PETALING JAYA: More items should be included in the list of zero-rated or tax-exempt goods to reduce the impact of the Goods and Services Tax (GST) on low and medium income earners, said 1Malaysia Foundation trustee Tan Sri Lee Lam Thye.

He said the introduction of the 6% GST in April 1 next year could result in an increase in the prices of goods.

“Certain businesses may take advantage of the opportunity to increase prices. This must be checked. Enforcement needs to be stepped up,” he added.

Lee also suggested that there be a review of the country’s taxation system following the introduction of the GST.

“It is time for the Government to offer more tax breaks to Malaysians for parental support to ensure taxation does not become a key factor in abandoning aged parents,” he said.

He added that private corporations which carried out charity and welfare activities should be given a bigger tax deduction.

“To encourage listed companies to be actively engaged in such activities, it is proposed that they be given double deduction of expenses incurred on such work,” he said.

Deputy Finance Minister Datuk Ahmad Maslan told the Dewan Rakyat yesterday that more people were now aware of the need to implement the GST as it could strengthen the nation’s economy.

However, he acknowledged that there were concerns that the cost of essential items would rise once the GST was implemented.

“The Government is aware of this concern. We have taken several steps to reduce the impact of GST on the cost of living and daily essentials,” he said.

Ahmad also said that more businesses had signed up for the system. As of Monday, 76,315 companies had registered.

He also said that April next year was the right time to implement the GST as the country’s economy was stable and inflation was at a manageable rate of 3.3%.

GST, he said, would replace the Sales and Services Tax (SST) and the Government was confident that the transformation in the country’s taxation system would help reduce leakages and help improve the efficiency in tax collection.

Ahmad said the Customs Department was also ready to implement the GST.

“It is in the midst of adding 677 staff to its workforce to ensure the GST implementation process is done smoothly,” he said.

Source: The Star Newspaper

Date: 8 October 2014

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