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Wednesday August 27, 2014 MYT 12:00:00 AM
Wednesday August 27, 2014 MYT 7:14:25 AM
PUTRAJAYA: Pawnbrokers are appealing to the Government for the sale of pledged items in a pawn deal to be exempted from the Goods and Services Tax (GST).
This was conveyed to Minister in the Prime Minister’s Department Datuk Dr Wee Ka Siong, who said an exemption in this case might ensure a fairer deal for customers and keep the pawnbrokers’ industry competitive.
Pledged items are sold to open buyers when they fail to be redeemed by the person who deposited it at the pawn shops.
“If a customer refuses to redeem the pledged items, the pawnbrokers have to sell the items to a third party in order to gain back their costs.
“In their opinion, the pledged items are not value-added items and should not be subjected to GST,” Dr Wee said after meeting representatives from the Pawnbrokers Association Malaysia here yesterday.
Other grievances from the association were also heard, including stiff competition caused by an increase in the number of pawnbrokers.
There are currently 400 Chinese pawnshops competing against bigger institutions in the business, such as selected banks which practise the Islamic pawn concept.
The association is also appealing to the Government to revise the Pawnbrokers Act 1972 (Act 81) and Regulations, including increasing the price limit for pledged items subjected to public auction.
“At the moment, they (the pawnbrokers) can only receive pledged items worth not more than RM10,000,” Dr Wee said.
“This price limit was set in 2006 (and has remained unchanged) but the price of gold has more than doubled since that time.”
Association president Datuk Ho Teck Kuen said the group would prepare a memorandum containing their proposals.
He said that when the memorandum was ready, it would then be submitted to Finance Minister II Datuk Seri Ahmad Husni Hanadzlah for consideration.
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