News

Malaysia postpones introduction of GST 
Posted on Thursday, February 23, 2006 - 12:00 AM

The Malaysian government has postponed the implementation of a goods and services tax to allow businesses time to get ready.
The Press Release by Bernama dated 22 February 2006 states:

The government has decided to postpone the implementation of the Goods and Services Tax (GST) from Jan 1, 2007 to a new date that will be announced later.

This is in order to provide sufficient time to resolve issues raised and for businesses to be GST-ready, the Ministry of Finance (MOF) said in a statement announcing the decision here Wednesday.

To spearhead the implementation of the new tax system, MOF said the government had formed a Tax Review Panel comprising representatives from the public and private sector to formulate the concept, legislation, process and procedures for the GST.

Over the last one year, the Tax Review Panel had presented a proposed GST model and has actively engaged in extensive consultations with the public and business community across the country.

The feedback has strongly suggested a need for more time particularly to further refine the proposed GST model and to ensure the readiness of businesses to implement the GST.

The private sector had highlighted the need for lead time, especially for potential changes in business processes, development of software and training of personnel.

The government had announced in last year's Budget that the existing sales tax and service tax would be replaced on Jan 1, 2007 with the GST, a broad based consumption tax based on the value-added concept.

The introduction of the GST is intended to improve tax compliance, through a more comprehensive, transparent and simple tax system.