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FMM backs planned reintroduction of GST to support economic revival

FMM In The News: THE EDGE MARKETS, Kuala Lumpur, Thursday, June 2, 2022 - The Federation of Malaysian Manufacturers (FMM) has lauded the planned reintroduction of the goods and services tax (GST) to support a stronger economic revival.

In a statement on Thursday (June 2), FMM president Tan Sri Soh Thian Lai said that the GST is a more transparent and effective tax regime compared to the sales and service tax (SST).

“Based on a survey carried out by the FMM on the reintroduction of the GST in May 2020, a total of 499 companies which responded to the survey strongly supported for the GST to replace the current SST 2.0 as the GST provides a fairer tax structure and eliminates cascading and compounding of taxes commonly found in the SST regime.

“In addition, prices of Malaysian exports will become more competitive on the global stage as no GST is imposed on exported goods and services, while the GST incurred on inputs can be recovered along the supply chain,” he said.

However, Soh said that as the change and transition to GST 2.0 can be challenging, the FMM called for the government to consult all stakeholders for a thorough review process to ensure the success of introducing an effective tax regime.

He said while switching back to the previous automated model under the GST Taxpayer Access Point (TAP) system will not be difficult as GST compliance systems are already in place, companies asked for a six-month transition period to change from the current SST to GST 2.0 based on the May 2020 survey.

Soh also said the reintroduced GST must 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.  

“Create more efficient schemes to replace the Approved Trader Scheme (ATS) and Approved Toll Manufacturer Scheme (ATMS) as they are complicated and difficult to implement,” he said.

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