GST to affect at least 122,000 companies

The eventual implementation of the Goods and Services Tax (GST) will affect at least 122,000 companies, as opposed to less than half of that now under the Sales and Services Tax (SST).

Around 55,000 companies are registered under the SST.

Royal Malaysian Customs Department's internal tax division deputy director, Subromaniam Tholasy, said the figure could even be higher, as there will be companies that voluntarily register for GST.

Companies which have an annual turnover of at least RM500,000 are required to register for GST.

By registering for GST, companies are able to get refunds for GST they incur in the process of doing business.

"If done right, companies will be minimally affected by the implementation of GST, the thing is for companies to prepare for it early," Subromaniam said before presenting at the Goods and Services Tax Seminar organised by Tricor Services (Malaysia) Sdn Bhd in Kuala Lumpur yesterday.

While the government is expected to give a window of between 12 months and 18 months for businesses to get ready before GST is implemented, he said it was wise for companies to start getting GST ready immediately, considering the extensive work that has to be put into it.

The implementation of GST will effect everything from human resources policies and systems and processes to stock management and invoicing of companies.

"We have been preparing seriously for the implementation of GST for five-and-a-half years now. We are ready for it. It's just a matter of when the government says we can go ahead with the implementation of it," Subromaniam said.

Some 70 industry guides are available, as reference for companies, to ensure that they understand GST requirements for their businesses.

Subromaniam also said that besides adding to the Government's coffers, GST would also make it more difficult for the "black market" or hidden sectors in Malaysia to remain hidden.

"Under the current tax regime, tax is only at source, but with the GST, due to its multi-level tax scheme, it would be more difficult for the hidden sectors to remain hidden," he said.

It is estimated that hidden sectors make up about 32 per cent of the country's economy.

"While we don't expect to expose all sectors, even exposing 2 per cent of it would translate to about RM14 billion, for the country," Subromaniam said.


Source : Business Times




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