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KUALA LUMPUR: Tony Pua (PH-Damansara) today explained the reasons why the government decided to scrap GST instead of lowering it to 3%.
Pua believed goods would be cheaper after the implementation of the sales and services tax (SST).
He said with 6% GST collection, the government collected RM40 billion and if it was lowered to 3%, it would amount to RM20 billion.
“It would not be efficient because the cost of collecting GST will be higher for the government and businesses,” he said while debating the second reading of the SST which is targeted to be rolled out on Sept 1.
For instance, he said businesses that make RM500,000 a year would have some RM1,250 collection from 3% GST monthly.
“That is not all; they also have to deduct input tax. That comes to RM1,000. After deductions, they pay the government RM250 monthly. Just to pay RM250 a month, they have to incur the cost of the computer (software), pay accounting firms, clerks and audit (firms). The cost is high.
“That is why a lot of small and medium business close down. Do you understand?” he told Khairy Jamaluddin (BN-Rembau).
Khairy, earlier during his debate, suggested to the government reduce the GST rate from 6% to 3% as the amount would almost be the same as the amount the PH government would be collecting from SST.
He said the BN government had decided to collect 6% to offer a lot of services to the rakyat, such as MyBrain, BR1M and allowances for fishermen, among others.
Source : http://www.freemalaysiatoday.com/…/sst-will-reduce-prices-…/
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