FMM welcomes govt’s willingness to study bringing back GST

PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) has welcomed news that the government would study the merits of reintroducing the goods and services tax (GST) to replace the current sales and service tax (SST) system.

In a statement, FMM president Tan Sri Soh Thian Lai said the GST was a more transparent and effective tax regime compared to the SST.

“Given the weak external environment and amid current global tensions, we believe that priority should be given to strengthen the economy and restore more favourable business conditions. Therefore we note this will be the opportune time to reintroduce the GST system.,” he said.

He further explained that under the GST system, prices of Malaysian exports will become more competitive on the global stage, which will in turn strengthen the export industry.

Soh also outlined a number of recommendations for the revision of the GST, which included reducing the GST rate from 6% to 3% to boost business conditions, zero-rating all essential goods and services and reducing the tax compliance burden by increasing the GST registration threshold to RM1 million.

Prime Minister Tun Dr Mahathir Mohamad said the government would study the merits of the GST if the people want it back.

He was responding to comments made by the Malaysian Institute of Economic Research (MIER) chairman Tan Sri Kamal Salih that the GST should be brought back in Budget 2020 but at a lower rate of 3%.

The GST of 6% was implemented in 2015 under the previous administration, but was scrapped last year following Pakatan Harapan’s victory in GE14.

For those who had already made the switch to the SST system, Soh said moving back to the GST system would not be difficult.

“For manufacturers, switching back to previous automated model under the GST Tax Payers Access Point system will not be difficult as GST compliance systems are already in place.

“We however look forward to be engaged in the study proposed by the government in order to provide manufacturers’ views on the possible reintroduction of the GST system,” he said.

source https://www.thesundaily.my/business/fmm-welcomes-govt-s-willingness-to-study-bringing-back-gst-CC1444224