Wong Ching Yong
SIBU (Feb 20): The Goods and Services Tax (GST) could actually help diversify the income sources for the government, instead of it solely relying on income and petroleum taxes, said chartered accountant Wong Ching Yong.
This, plus it being a transparent form of taxation, should warrant the return of GST by the government, he said when asked about his wish-list for Budget 2023, set for re-tabling in Parliament this Friday (Feb 24).
Introduced and implemented during former prime minister Datuk Seri Najib Tun Razak’s time, the GST replaced the Sales and Services Tax (SST) in 2015, but was abolished almost immediately after 14th general election (GE14) in 2018, when the Pakatan Harapan took over the federal administration.
“To the best of my knowledge, the GST is basically a form of taxation system imposed by a government so that only a single tax in the economy is placed upon goods and services offered.
“GST can help the diversification of income sources for a government, instead of it just relying on income and petroleum taxes.
“For retailers, GST will not be cost-incurred, meaning that there are no hidden taxes. The overall cost of doing business, because of this, becomes lower which, in turn, can help the exports sector be more competitive,” said Wong.
On GST being a transparent form of taxation, he said it allowed businesses to show the tax applied directly on the sales invoices through a mechanism called ‘input and output taxes’.
“Customers know exactly how much tax they are paying for any product or service that they acquire.
“Under GST, the tax burden no longer falls on the shoulders of just one party; instead, it is divided equally between the manufacturing and the services sectors.
“GST would be charged on the manufacturing costs and only be collected at the point of sale under the previous GST Act 2014. Doing business in Malaysia would become easier without various hidden taxation costs, should GST be introduced again,” he said.
Nonetheless, Wong acknowledged the main argument against bringing back GST was rising cost of goods, resulting in it burdening the public who would then have to pay higher prices for goods and services.
“Those arguing against the GST also claim that many people would not have the ability to cover the high cost of living that is not equally matched by their income needs.
“Meaning, a billionaire will pay the same GST as a pauper.
“As GST is a form of broad-based taxation, it would impact many Malaysians who are not taxpayers right now.
“But, it can arguably be a fair tax because one would only pay tax if one makes purchases or acquires goods and services.”
Wong also acknowledged concerns about the possibility of the GST rate to increase in the future, so as to increase the revenue for the government.
“Like in Singapore, it started with two per cent GST – now, it is nine per cent.
“My personal view: if the GST were to be reintroduced, it should start with two per cent first.
“Also, if GST were to be reintroduced, the collection, enforcement and management of this tax should be placed under Inland Revenue Board (IRB) instead of the Malaysian Royal Customs.
“I believe that the IRB has more experienced human resources to deal with various direct taxes such as personal income tax, corporate tax, real property gains tax, and stamp duties, among other categories.
“The IRB officers have been dealing with many complex tax issues such as transfer pricing and tax disputes. The Malaysian Income Tax Special Commissioners, a tax tribunal, has a long and reputable history of hearing and deciding on tax disputes. Many decisions of the Special Commissioners were upheld in the High Court, Court of Appeal and even Federal Court,” he elaborated.
from Borneo Post Online https://ift.tt/LpOKW3l
via IFTTT
No comments:
Post a Comment