Government urged to raise GST threshold to RM1m

GEORGE TOWN — The Malaysia/Singapore Coffee Shop Proprietors’ Association is calling for the Goods and Services Tax (GST) threshold to be raised and its rate reduced in the coming Budget.

Association president Ho Su Mong said cutting down the tax rate by half to three per cent would be the best option, if the government was considering reducing it.

The present threshold for GST is RM500,000, but coffee shop operators want it raised to RM1 million.

The association, which has more than 20,000 members and 43 affiliate-association members in Malaysia, said it has been badly hit by GST.

“We are of the view that the threshold should be reviewed,” Ho said.

“The GST rate should be lowered to three per cent so that our members and customers will not be affected.”

Since GST was introduced on April 1, he said the cost of many essential goods had gone up, which in turn have pushed up the cost of living and business.

“We appeal to the government that essential goods and services, like electricity, water, assessment rates and licence fees, be reviewed in order to lower the rates, so that the cost of running a business and the cost of living can be reduced.”

He said the income and buying power of many people have been affected due to the current economic situation and ringgit depreciation.

Costs of raw materials used by coffee shops have also been affected by the cost of transport, Ho said, while calling for the authorities to help regulate and prevent its fluctuation.

For example, he urged highway concessionaires and the authorities not to increase toll rates for the next few years.

Ho also pointed out that the levy charges for foreign workers for the service industry had been high all along, at a rate of RM1,850 per worker, that could reach up to RM2,800 if insurance, processing fees and medical check-ups were included.

He said currently, the service industry is facing a shortage of manpower due to the government’s ban on foreign workers.

“We hope the government would relax the ruling to enable coffee shop operators to recruit foreign help.

“The minimum wage should not be high, but determined by market demand.”

Seahorse Cafeteria supervisor Bok Chek Peng, 43, said the outlet had suffered a 30 per cent decrease in business.

He expressed hope the GST rate would be lowered. 

“People are being careful with their spending. I hope the new Budget can help bring down the prices of goods so that customers will start spending like before,” said Bok.

Top One Restaurant manager K. Selvam, 35, said GST charges were affecting business as customers were unhappy to pay more.

He sets aside between RM50 and RM150 daily for GST payments, depending on the day’s takings.

“GST is affecting our profit margin,” said Selvam.

He said depreciation of the ringgit had caused prices of imported raw materials like spices, onions and vegetables to soar.

“People want GST to be reduced and it is wise to reduce it to the minimum,” he said.