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(Dec 24, 2009) The Goods and Services Tax Bill 2009 was tabled in the Malaysian Parliament on December 16, 2009. The Second Finance Minister, Ahmad Husni, stated that the government expects a goods and services tax (GST) at a rate of 4% to be implemented by mid-2011. (Goods and Services Tax Bill Tabled in Dewan Rakyat, BERNAMA (Malaysia), Dec. 16, 2009, available at http://www.bernama.com/bernama/v5/newsindex.php?id=462580.)
The GST would replace the existing single-stage sales tax (with a general rate of 10%) and service tax (5%) imposed under the Sales Tax Act 1972 and the Service Tax Act 1975. The Minister stated that companies with revenue of less than MYR500,000 (about US$145,000) would be exempt from the GST, as would about 70% of small- and medium-sized enterprises. (Id.) There would also be exemptions for certain essential goods, including agricultural products and basic foods such as rice, fish, meat, and chicken. (Id.)
The Minister said that, with the implementation of the GST, the government would collect revenue of MYR13 billion in the first year, compared to the current annual MYR12 billion. Businesses would save MYR4.1 billion in taxes, with export sectors saving MYR1.4 billion. "The main purpose for the government to introduce the GST is to make the current taxation system more comprehensive, efficient, effective, transparent and business friendly," the Minister said. (Id.)
The government had previously announced plans to introduce a GST from January 1, 2007, but put these on hold following concerns from the private sector about system requirements and the need for a long lead-in time. (Deferment of GST a Wise Move, Says PIKOM, BERNAMA (Malaysia), Feb. 23, 2006, available at http://web10.bernama.com/kpdnhep/news.php?id=181982&.)
|Author:||Kelly Buchanan More by this author|
|Topic:||Taxation More on this topic|
|Jurisdiction:||Malaysia More about this jurisdiction|
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Last updated: 12/24/2009