The other elements are the right people and the way in which the proposal is packaged, deputy director general Datuk Zainul Abidin Taib said, citing the success of the GST in New Zealand
“In formulating the GST for Malaysia, these five elements are important considerations too for its successful implementation,” he said at the opening of the GST Expo and Conference 2014 here today.
Zainul Abidin said the GST eliminates inefficiency in the current tax system, which fails to distinguish between the cost of goods sold and the tax element in the price.
He said the major weakness in the current tax system often results in prices of products escalating unlike with the GST, where businesses cannot treat the tax as part of their cost as any GST incurred is credited against the output tax.
“Although sales tax is charged either at the manufacturing level or at the point of entry, it often creates a pyramid or compounding effect where the percentage of mark-up in the channels of distribution is often applied to both the tax element and the cost of goods sold,” he said.
He urged businesses not to take advantage of the GST introduction to increase prices as they might be caught under the Price Control and Anti-Profiteering Act which will be strictly enforced by the Ministry of Domestic Trade and Consumer Affairs.
Zainul Abidin said in the GST awareness and trade outreach programme, the Royal Malaysian Customs actively pursues a hand-holding training programme catered to specific industries, with priority given to those who are GST-registered.
Participants are given detailed explanations on such matters as GST specific treatment for specific business sectors, cash flow implications, impact on pricing policies and accounting system, workflows and processes, and the documentation requirements particularly tax invoices and GST reporting, he added.
— BERNAMA
