Wednesday, March 10, 2010

Husni denies speculation that GST will be scrapped

Second Finance Minister Datuk Seri Haji Ahmad Husni Mohamad Hanadzlah (picture) dismissed speculation that the proposal to implement the goods and services tax (GST) has been cancelled.

There was some speculation that the GST proposal was scrapped during discussions in yesterday’s cabinet meeting.

“We did not make a decision to say we did not want GST,” Husni replied today when asked by reporters about the speculation. “There was no decision made.”

“We discussed in detail whether people understand GST and on the implementation of it — how ready are we? We do not want, if it is implemented, for it to cause difficulties to the people.”

The Najib administration had proposed to implement GST in order to raise revenues as currently only a small percentage of Malaysians pay income tax and GST would be much more broad based than the current sales and service tax which it will replace.

Malaysia is one of the few countries that have yet to implement GST in the Asia Pacific region after several earlier proposals were scrapped.

Critics however contend that GST would aggravate inflation but supporters of GST say that the Malaysian government has no choice if it wants to raise revenues.

With a state election looming in Sarawak and talk of a general election sometime after, observers say that the Najib administration has also got to be careful how it handles the issue especially with many Malaysians grappling with rising costs of living.

The second reading of the GST bill in parliament will be sometime this month and government officials said earlier that it will be implemented mid 2011.

courtesy of Malaysian Insider

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