FMM president Tan Sri Dato’ Soh Thian Lai said the government’s focus now is the revival of the economy and manufacturers will now need to prioritise their resources on rebuilding their business. – Bernama photo
KUCHING (Jan 6): The Federation of Malaysian Manufacturers (FMM) is calling on the government to reintroduce the Goods and Services Tax (GST) in the coming revised 2023 Budget at a rate that would not burden the people but still help widen the country’s revenue base to reduce fiscal deficit.
FMM president Tan Sri Dato’ Soh Thian Lai said the government’s focus now is the revival of the economy and manufacturers will now need to prioritise their resources on rebuilding their business.
“FMM proposes for the reintroduction of the GST to be implemented only in 2024,” he said in a statement yesterday.
Soh said manufacturers had proposed improvements to the new GST to be more consumer and business-friendly including reducing the rate to four per cent.
He said manufacturers had also proposed to gradually bring down corporate tax to 20 per cent as well as zero-rate for all essential goods and services.
He said the new GST should also maintain its registration threshold at RM500,000.
“The government ought to minimise delay in refunds especially for exporters and businesses with zero-rated supplies as the long refund period between six and eight months has rendered the GST into an accumulating tax burden.
“The government should also include the provision of interest on late payments and refunds in the GST legislation to ensure strict compliance with the client charter and integrity of the system,” he pointed out.
Soh said manufacturers had also proposed to create more efficient schemes to replace Approved Trader Scheme and Approved Toll Manufacturing Scheme as they are difficult to implement.
He added that the government must ensure proper mechanisms are in place to monitor price control and anti-profiteering in the market when the tax system is reintroduced.
“As this broad tax base system would increase indirect taxes, it will give flexibility to the government to reduce direct taxes (personal income tax and corporate tax) to make Malaysia a more attractive business destination.
“In this regard, GST implementation should not be considered in isolation but as a part of the holistic assessment of Malaysia’s tax system which will require the government to consult all stakeholders for a thorough review process,” he said.
While the reintroduction of GST would strengthen the country’s fiscal position, Soh said the tax system must be easy to manage and also not increase the cost of doing business.