KUCHING: The taxation process would be simplified once the Goods and Services Tax (GST) is abolished, Kuching Chinese General Chamber of Commerce and Industry (KCGCCI) secretary-general Jonathan Chai pointed out.
According to him, the transition would facilitate industry players to channel their resources to business developments, instead of going through the hassle of GST refund process.
“Businessmen who no longer need to pay GST can use this fund to stimulate sales, set to bring about positive impact, given the present economic downturn,” he said when prompted for comments on the move by Pakatan Harapan (PH)-led federal government to abolish GST, and reinstate Sales and Services Tax (SST).
According to Chai, all that the industry players are asking for is a business-friendly environment that would take the country’s economy to new heights.
“Strictly speaking, the implementation of GST is not so bad a policy merely because such levy has been recognised as the most just and most comprehensive mechanism for taxation in the world.
“More than 100 countries across the globe have implemented GST, which is levied on most goods and services sold for domestic consumption,” he said, describing GST as fair in the sense that it is levied on consumption, while selected goods and food items in Malaysia have zero-rated GST.
It is learnt that France was the first country to implement GST in 1954 – since then, about 160 countries have opted for this tax system. In this regard, Chai believed that such a tax system had helped address the loophole in collecting tax revenue in any country.
However, the problem with the GST implementation in Malaysia was the inefficiency in administering the revenue collected – not to mention the inflation that affected many, he said.
He noted that apart from the 1Malaysia People’s Aid (BR1M), the previous government did not come up with other effective measures to help cushion the blow from inflation. He said some retail businesses had to struggle due to the implementation of GST.
Moreover, he opined that the government of the day should cut down bureaucracy in order to provide an environment more conducive to business growth.
“We would appreciate less ‘unreasonable’ administrative interference and less red tape in doing business. This is especially pertinent for small and medium enterprises (SMEs).
“SMEs are mostly traditional businesses with very few employees. Imagine the hardship that they have to undergo if they were to meet certain requirements set by the government.”
Chai said recruiting extra hands would definitely increase the cost of operations and such burden would put SMEs in a less-advantaged position to compete in the market.
He opined that the new federal government would continue to attract foreign investments and investors – those from China, in particular. He said many China-based corporations had the financial means and strength to boost the economy and saw no reason for the government to change such economic policies.
“There is no way the new government would introduce any unfriendly policy towards China, including the Chinese government’s ‘One-Belt, One-Road’ policy.
“As a strategic partner from Asean having bilateral relations with China over the past decades, Malaysia is expected to work with, rather than against, China.
“The new prime minister has said that he would only review certain projects, which should not put Malaysia’s interest at stake. As long as those projects were not awarded in an illegal manner, I believe the new government would carry on with the implementation,” he added.
Chai also believed that the state government would proactively collaborate with the federal government.
“Sarawak will have a representative in the federal cabinet. The state government should be more than willing to cooperate with the federal government when it comes to defending Sarawak’s rights.
“In addition, the Pakatan Harapan election manifesto has promised to give Sarawak’s rights back to Sarawak such as increasing the oil and gas royalties from five to 20 per cent.”
Chai said Sarawakians are looking forward to Pakatan Harapan-led government fulfilling all the election promises.
He also hoped that the implementation of the Pan Borneo Highway project would not be affected because of the change of government.
“We hope that the new government would allocate more funds to Sarawak to upgrade our infrastructure facilities and put the state on par with its counterparts in Peninsular Malaysia,” added Chai.