KUALA LUMPUR, May 31 – The zero-rating of the Goods and Services Tax (GST) starting June 1 will be a welcome relief for Bumiputera manufacturers, said Bumiputera Manufacturers and Services Industry Association of Malaysia (PPIPBM). Its President, Datuk Nurammar Abu Bakar said PPIPBM had been consistent in its stand that the GST was a burden to manufacturers and small and medium enterprises (SMEs).
“The GST puts a strain on our cash flows, especially for SMEs. Even though manufacturers are allowed to claim input tax credit, it takes a long time to get the refund, up to six months or even up to one year due to technical factors. Ironically, entrepreneurs have to pay their taxes immediately upon receiving tax invoices,” he told Bernama after the PPIPBM annual meeting here recently.
The meeting was officiated by Parti Pribumi Bersatu Malaysia Secretary-General Datuk Dr Shahruddin Md Salleh. Also present was PPIPBM patron Datuk Seri Raja Nong Chik Raja Zainal Abidin. On reduction of costs for manufacturers, Nurammar opined that the effect of the zero-rated GST would not be immediate as raw materials purchased earlier would still be affected by the GST.
However, he believed the costs of new orders would be lower. Meanwhile, Shahruddin said after the implementation of the zero-rated GST, manufacturers and traders would have a three-month cooling-off period before the Sales and Services Tax came into effect.
“During that period, the government will monitor the effects of the abolition of the GST and see if the prices of goods could be reduced before making its next move,” he said. On another note, he said PPBM remained committed to strengthening the Bumiputera agenda under the new government. — Bernama