PwC: Decide quickly on goods and services tax

The goods and services tax (GST) should be implemented now due to Malaysia's fairly strong economic fundamentals.

PricewaterhouseCoopers (PwC) senior executive director Wan Heng Choon said the government should not delay the implementation date any longer as the world economy is unpredictable.

"Once the government decides to implement it now, it will take another 12-18 months for the GST to take place as it is a fairly complex tax structure."

" It is important that the government decides quickly on the GST as businesses don't like to operate in vaccum," Wan told reporters at its headquarters here yesterday on its Budget 2013 wishlist.

PricewaterhouseCoopers Taxation Services Sdn Bhd senior executive director Steve Chia Siang Hai said the government must not leave the matter undecided for so long, as businesses need to strategise and prepare their next of action once the GST is announced.

Malaysia is currently in the midst of implementing the GST at between five and seven per cent, but is undecided on when to enforce it.

This tax regime will abolish the six per cent services tax and the 10 per cent sales tax currently charged to consumers.

Chia said a rate of four per cent is neutral, while a six per cent is fair to Malaysians.

Australia has a GST rate of 10 per cent and Singapore seven per cent.

Meanwhile, on the 2013 Budget, which will be table in Parliament on September 28, PwC senior executive director Jagdev Singh said one of the many areas which the government should give its focus is the property market by providing incentives and support to increase affordability.

The 1Malaysia Housing Programme and the Projek Perumahan Rakyat should review the eligibility criteria for low-cost housing, developers should contribute to a trust which will coordinate construction, allocation and maintenance of low-cost housing.

"For first-time homebuyers, tax relief should be given to them on interest expense incurred on loans and a stamp duty exemption for properties below RM500,000."

On measures to curb spiralling property prices, Jagdev said additional stamp duty should be imposed on foreign ownership and acquisition of third residential properties and more.

He said the government should reintroduce the real estate property gain tax with scaled rates of between five per cent and 30 per cent depending on holding period.

He said a reduction of one per cent in corporate tax from 25 per cent to 24 per cent will result in an estimated revenue loss to the government of RM2 billion.