ACCCIM Media Conference on Survey Report on the GST Implementation in Malaysia

Speech by Datuk Ter Leong Yap, President of ACCCIM

2.30 p.m. 24-8-2015 (Monday)

ACCCIM Conference Room

Good afternoon,

My fellow colleagues of ACCCIM,

Members of media,

A very warm welcome to all of you for attending today’s Press Conference.

The Goods and Services Tax (GST) has been implemented for nearly 5 months since its effect on 1st April 2015. In this early stage of implementation, different interpretations and arguments have arisen between the government, businesses and consumers on products and services that required to paying GST. To date, there are still a number of technical issues encountered by different industrial and business sectors, and are under clarifications with the Royal Malaysian Customs and the Ministry of Finance.

Although the government has repeatedly emphasizing that the implementation of GST will not add burden to the cost of doing business, however, cost are adding-up because the business community would require to purchase or set up GST compliance accounting software, appoint GST consultants, or even employ additional manpower to handle taxation. On top of that, businesses are required to pay GST before they can claim input tax from the government of which the company cash flow is adversely affected. The cash flow problem emerged when ACCCIM received numerous complaints from businesses that input tax refund were not credited to their accounts with delay of two to three months after the first submission of GST return. The business community are seeking help from the ACCCIM to urge the Royal Malaysian Customs to keep their promise as outlined in the GST Act that input tax refund will be done within 14 days for electronic submission, and 28 days for manual submission.

Some businesses are encountering problems and challenges after the implementation of GST. The ACCCIM has established a Taxation Committee with the objective to effectively tackle and proposed remedial actions to the various technical issues related to GST. The Socio-Economic Research Centre (SERC Sdn. Bhd.) of the ACCCIM has organised a Consultative Panel Discussion in June, invited representatives of major chambers of commerce and national level trade associations such as Malay Chamber of Commerce Malaysia (MCCM), Malaysian Associated Indian Chambers of Commerce and Industry (MAICCI), Federation of Malaysian Manufacturers (FMM) etc., as well as taxation experts and business representatives so as to solicit their views, feedback and recommendations on issues encountered for onward submission to the government with the hope that issues could be expeditiously resolved. This survey report conducted by the ACCCIM’s Taxation Committee is to collect the various facts and figures on GST from businesses and served as a basis for drafting of ACCCIM memorandum for consideration of the government. The ACCCIM is a member of the GST Monitoring Committee of the Ministry of Finance as well as the GST Technical Committee of the Royal Malaysian Customs, through our representatives of these committees, ACCCIM has been actively reflect the views and issues of the businesses so as to seek remedial measures.

According to Y.Bhg. Dato’ Haji Matrang bin Suhaili, Deputy Director General of Royal Malaysian Customs, the government has collected a revenue of more than RM 6.1 billion in the first two months after the implementation of GST, and is expected to achieve the targeted GST revenue collection of RM 23.7 billion in 2015. The total taxation revenue for 2015 is estimated to exceed RM 50 billion. ACCCIM urge the government to manage the revenue collected in a prudent matter, to utilise it for the development and benefits of the people so as to reduce the burden of the business community and the people.

The nationwide inspection and enforcement actions by the Ministry of Domestic Trade, Cooperative and Consumerism on businesses under the “Price Control and Anti-Profiteering Act 2011” after along with the implementation of GST, particularly to the Foods & Beverages and Retails industry has distracting the business operation. While supporting the government in taking action against those businesses that intentionally increase their prices to gain excessive profits, ACCCIM urge the government to educate business community of the Act, and the calculation formula in order not to create fear among the business community as this will not help the businesses, but creating antipathy towards government.

ACCCIM will continue to monitor and seeking solutions to issues related to implementation of GST, and welcome businesses to submit issues encountered, either technical issues or issues related to delay of input tax refund to ACCCIM and any of our Constituent Chambers in order for our representatives to deliberate these issues with the Ministry of Finance and Royal Malaysian Customs so as to seek solutions.

Ladies and Gentlemen,
We will invite Mr. Koong Lin Loong to present the survey findings to you shortly. On behalf of the ACCCIM, I thank all respondents for taking time to participate in this survey.

Thank you.

More details on ACCCIM Survey Report on GST Implementation in Malaysia