GST Not The Only Factor Affecting Prices, Says Minister

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KUALA LUMPUR, Sept 19 – The Goods and Services Tax (GST) will not be the only factor affecting price movements when it is implemented in April next year, according to Deputy Finance Minister Datuk Chua Tee Yong. He said price movements were prompted by a combination of factors, including foreign exchange rates, cost of services, and supply and demand. “All these factors play a role in setting the prices. With or without the GST, there will be inflation and price movements,” he told reporters after the launch of a seminar on the GST implementation and its impact on the tourism industry today.

Asserting the need for the country to implement the GST in order to remain competitive in exports, he said, “In Asean, Thailand and Indonesia’s exports are GST-free. In Malaysia, we still have the sales and service tax, for which exporters could not claim from the government. “With the GST, this will be removed. This is important because businesses cannot survive from domestic demand alone as we don’t have a huge population base.” On GST registration, he said so far 42,000 companies had complied with the requirement with between 1,000 and 1,500 business registering daily, peaking at 3,000 registrations yesterday.

“If we were to maintain this trend, we would be able to get 200,000 companies registered by year-end,” he added. The finance ministry wants the GST to be an equitable tax system that will have a win-win structure between the public sector and the private sector, including the tour and travel sector, he said. In 2013, Malaysia registered 25.72 million tourist arrivals, generating tourism receipts of RM65.44 billion. Tourism Malaysia is confident of achieving its target of 36 million tourist arrivals and generating an income of RM168 billion by 2020.

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