Published: Wednesday December 16, 2009 MYT 10:21:00 AM
Updated: Wednesday December 16, 2009 MYT 12:54:19 PM
Parliament: GST Bill tabled for first reading (Update)
By LEE YUK PENG
KUALA LUMPUR: The much anticipated Goods and Services Tax (GST) bill is tabled in the Dewan Rakyat for first reading by Finance Minister II Datuk Seri Ahmad Husni Hanadzlah.
He also told the House that the second reading of the bill would be in the meeting of he Dewan Rakyat scheduled for March next year.
Later, at the Parliament Lobby, Ahmad Husni said the GST of 4% would be implemented in the middle of 2011.
With the implementation of GST, Husni said it would be a win-win situation for all as the Government would be receiving an additional RM1bil in revenue for the first year - from the current RM12bil to RM13bil.
At the same time, he said businesses would save RM4.1bil in taxes and the export sector would save RM1.4bil.
"The Government is proposing to impose GST at a rate which is lower than the sales and services tax rates, and to allow certain exemptions from GST, expecially on essential goods such as agricultural products - vegetables, basic food like rice, sugar, flour, cooking oil, fish, meat and chicken - so as to ensure that it will not burden the rakyat at large, especially the poor and the lower income group.
"The main purpose for the Government to introduce GST is to make the current taxation system more comprehensive, efficient, effective, transparent and business friendly.
"The sales and services tax will be abolished and be replaced with GST, which is a more efficient tax system in terms of cost effectiveness," he said.
Ahmad Husni said based on the proposed model, businesses were expected to benefit in terms of lower cost of doing business as GST was not considered as cost to business.
"GST will be able to reduce bureaucratic practices in the management and administration of the country's tax system and overcome the various inherent weaknesses that exist in the imposition of sales tax and service tax," he said.
He said companies with revenue RM500,000 and below would be exempted from imposing GST and about 70% of small and medium sized industries would also be exempted.
Asked whether GST would have any impact on inflation, Ahmad Husni said: "No. It will make businesses more competitive as the cost of business has reduced."