Malaysia a GST role model for Middle East, Customs official claims

Datuk T Subromaniam (right) says the Middle East is now looking to follow in Malaysia's footsteps and implement the consumption levy in their respective countries. ― Picture by Saw Siow Feng
Datuk T Subromaniam (right) says the Middle East is now looking to follow in Malaysia's footsteps and implement the consumption levy in their respective countries. ― Picture by Saw Siow Feng

KUALA LUMPUR, March 10 ― Countries in the Middle East are looking to Malaysia as a role model to introduce a similar Goods and Services Tax (GST), the Customs Department’s second-in-command  Datuk T Subromaniam asserted today.

He said the Middle East is now looking to follow in Malaysia's footsteps and implement the consumption levy in their respective countries, especially since the global oil price route have severely affected their income.

“You know the Middle East see us as a role model. They are looking at us because of our success in implementing the GST,” Subromaniam told a press conference here after attending a seminar on the tax system.

The seminar was organised by international accounting firm Grant and Thornton.

“UAE for example, will be implementing the GST by 2018… and they look at our success,” the senior Customs man added.

He went on to say that the respect given to Malaysia on its GST success proved critics of the tax wrong, adding that Putrajaya should instead be commended for its ability to roll out a complex levy system.

“You know six countries that wanted to implement GST had to cancel it. So I think we have done quite well,” Subromaniam said.

Putrajaya recently announced it had collected more than RM29 billion from the GST in 2015, RM2 billion more than its target.

It has increased its 2016 target to RM39 billion.

Subromaniam said the government will continue to fine-tune the tax system, but declared that it had done a sterling job despite the initial teething issues.

The Najib administration introduced the unpopular GST last April.

The introduction prompted a drop in consumer spending and sentiment, which fell to a five-year low in the first quarter of this year, according to data from banks and research firms.

Putrajaya has defended the new tax. Najib said the GST had helped keep the government running as revenue from oil shrank due to low prices worldwide.

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