KUALA LUMPUR: The Federation of Malaysian Manufactures (FMM) is supportive of the government’s consideration to bring back the Goods and Services Tax (GST) to replace the existing Sales and Services Tax (SST).
FFM president Tan Sri Soh Thian Lai said the federation has always advocated the usage of the GST, which was a transparent and effective tax regime used in 170 countries.
He said if the GST was re-introduced, it would encourage Malaysian exports to be more competitive on the global stage.
“No GST is imposed on exported goods and services, while GST incurred on inputs can be recovered along the supplies chain.
“This strengthens our export industry, helping the country progress even further.
“Given the weak external environment, and amidst current global tensions, we believe that priority should be given to strengthen the economy and restore more favourable business conditions,” said Soh in a statement today.
He said when it came to the readiness of manufacturers, it would not be too difficult to switch back to the previous automated model under the GST Tax Payers Access Point (TAP) system as the system was already in place.
Soh said the FMM was ready to work with the government to provide the manufacturers' views on the possible reintroduction of the GST.
The FMM also listed five proposals to make the GST more consumer- and business-friendly:
* Lower the GST rate from 6 per cent to 3 per cent to boost business conditions, which lead to higher investments and employment opportunities as well as higher disposable income for Malaysians.
* Introduce zero-rates on essential good and services.
* Reduce tax compliance burden by increasing the GST registration threshold to RM1 million.
* Minimise delay in refunds as the six to eight-months refund period is a tax compliance burden
* To include provisions of interest on late payments and refunds in the GST legislation to ensure strict compliance to the client charter and integrity of the system.
Earlier today, Prime Minister Tun Dr Mahathir Mohamad said the government will consider bringing back the GST if the people wants it. He said a study would be conducted if the GST is really better than the current SST.