'Implement GST when economy is in growth stage'
KUALA LUMPUR: The goods and services tax (GST) should be announced now and implemented soon after when the country's economy is still in a growth stage, says a tax expert.
PricewaterhouseCoopers Taxation Services Sdn Bhd senior executive director Wan Heng Choon said the government should not wait for the global economic crisis to end before implementing the GST.
"The government should announce the GST now and allow businesses a grace period of 18 months to get ready for the new tax system," he said on the company's 2014 Budget wish list here yesterday.
Wan said the GST, if implemented, should be at six per cent, as it is equivalent to the present government sales and services tax.
"At six per cent, it will address the nation's fiscal deficit and provide for the transformation of a fundamental and equitable tax system in the country," he said.
He said the GST will also be a more stable source of revenue compared with income tax as it is less susceptible to economic downturns due to the consumption nature of the tax.
"The government is expected to rake in an annual revenue of about RM32 billion if the GST is implemented at six per cent," he said.
However, he said if the GST is at four per cent, it will only be "revenue neutral" and there is no point in imposing it.
"No reason to put the country through the GST if all you want to do is to take the same amount of money from the current consumption tax," he said.
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