KUALA LUMPUR: Malaysia’s export industry is bound to be more competitive when the Goods and Services Tax (GST) comes into effect next April, said Deputy Finance Minister Datuk Chua Tee Yong.
“Under our current sales and services tax (SST) system, we are losing out in the competitive global market because there is still a tax imposed on items exported from Malaysia.
“This leaves us at a disadvantage because most Asean countries we compete with already have GST in place, which means they do not have a tax on exported items,” he told reporters after opening a briefing on GST for entrepreneurs here yesterday.
The Customs Department guide to GST in exports states that all goods exported from Malaysia will be zero-rated, which means GST would be charged at zero per cent.
As such, an exporter need not collect GST on his exports, rather he would be able to recover the GST incurred by crediting the amount against his output tax.
“The lower cost of exporting items will translate into higher competitiveness as there will be more participation from exporters.
“This, in turn, will lead to a higher volume of trade,” said Chua.
On the number of companies registering for GST, Chua said the response was increasingly positive, thanks to talks and briefings on the taxation system nationwide.
“Initially, we were getting an average of 200 to 500 companies registering per day, and over the past few months this has increased to between 1,000 and 1,500.
“This week, I was told that an average of 2,500 companies registered each day. If we can maintain this, I am confident of reaching our target of registering 123,000 companies by the end of this month,” he added.
As of two days ago, 56,400 companies have registered for GST.
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