KUALA LUMPUR, May 2 — Authorities must not embark on a campaign to punish businesses for violations of the complex Goods and Services Tax (GST) that is just a month old, a major trade organisation said today.

Expressing concern over an announced enforcement campaign to punish businesses for breaking the new tax rules, the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) said it was unreasonable to expect full compliance for a tax that has even the authorities still confused.

“Both the business community and the Customs are on steep learning curves and the months before the [deadline] until even now there are many questions and issues that the Customs themselves are not absolutely clear and are unable to give definite guidance,” it said in a statement.

“Instead of the Customs’ promise to assist and handhold through the learning period, the Customs have — from day one — been intensely scrutinising, threatening, charging and arresting those who have not correctly complied with the GST rulings.”

It said that despite the promised two-year grace period for firms and authorities to resolve misunderstandings of the new consumption tax, traders have been given no leeway for any mistakes detected.

Although expressing agreement with action against those who abused the new tax, the group urged the Customs Department to hold off punishing traders for errors in implementing the GST within the pledged teething period.

“We call upon the Customs to honour the agreement to have a moratorium of two years not to penalise genuine mistakes and misunderstanding of the GST rules with, of course, the caveat that this moratorium does not apply to those who wilfully design to abuse the GST implementation.”

Customs director-general Datuk Seri Khazali Ahmad reportedly said enforcement officers will be sent out as “mystery shoppers” to detect businesses that were not in compliance with the GST as the one-month grace period has expired.

The GST came into effect on April 1 and replaces the Sales and Services Tax, but the extensive list of zero-rated and exempted categories has made what was meant to be a universal tax complex and confusing.

Some smaller firms — several that are decades-old — have also decided to shutter their businesses completely, citing inability to cope with the complexities of the new tax.