Sarawak Timber Association calls on federal govt to re-introduce GST
STA chief executive officer Annie Ting said most businesses already had GST-ready accounting systems and their personnel were also familiar with compliance procedures in the previous implementation from April 2015 to August 2018.
"Hence a reintroduction of GST may not require a long preparation of 18 months like when
it was introduced in 2015," she said in a statement today.
Ting reckoned that a short six-month period would suffice for its smooth re-implementation.
She added that as previously experienced, GST could bring in higher and stable revenue for the government, which were crucial for economic stability and development funding.
She said that it was generally felt that GST could be introduced at a low rate, say three per cent, instead of six, to mitigate price increase which may be one-off and inflation.
Ting said targeted subsidies to B40 households, such as direct cash aid, could be dispatched to offset their burden on price hikes, adding that basic groceries and essential services such as education and healthcare service might be exempted from the tax.
Ting said the expanded SST, which coincided with Phase 3 of the e-invoice rollout, had left businesses scrambling to adapt to new compliance requirements on a tight deadline.
"While consumers may receive temporary relief, businesses face a permanent increase in complexity and cost," she said, adding that the cascading tax effect inherent in the SST system remained, where taxes had accumulated through the supply chain, ultimately raising the cost of doing business.
"For industries like timber, the reclassification of previously exempt goods such as sawn timber and plywood into the five or 10 per cent sales tax bracket presents a significant challenge.
"This situation is further complicated by the intricate sales tax exemption mechanisms for raw materials, which create compliance burdens for manufacturers producing both taxable and non-taxable goods.
"These industry-specific issues highlight a disconnect between broad fiscal policies and the granular realities of business operations," she said.
She said Malaysia's fiscal health required a stable revenue stream and GST was the best option for long-term economic resilience despite issues such as slow refunds.
"Any effort to strengthen the country's fiscal position, including through the SST, must be built on transparency and accountability.
"Without addressing crucial points such as leakages and weak governance, even the most well-designed tax measures will struggle to achieve their goals," she said.
She said the federal government, rather than simply introducing new taxes or expanding the scope of the SST, its focus should be on restoring public trust and ensuring the responsible use of public funds.
"A fair and effective tax system can only succeed when revenue is managed holistically and with integrity," Ting said.
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