Malaysia: Budget 2014

The Goods and Services Tax (GST), abolition of sugar subsidy, 1Malaysia People's Aid (BR1M) and higher property taxes - these were the highlights of Prime Minister Datuk Seri Najib Tun Razak's Budget 2014.

Najib, who presented his budget speech before Parliament on Friday, 25th October 2013, first shook the House when he announced that the hotly debated GST would be introduced from April 1, 2015 at a rate of 6%.
"With the implementation of GST, the Government will be able to address the weaknesses in the current taxation system.

"As an example, if we were to buy a carbonated drink in a restaurant today, we would not notice that we are paying double taxes, which are sales tax and service tax."With the GST system, consumers will only need to pay tax once and the price of goods should be cheaper," he added.

Najib, who said the 6% GST was the lowest in the Asean region compared with 10% in Indonesia, Vietnam, Cambodia, the Philippines and Laos, and 7% in Singapore and Thailand, added that the Government would also provide a one-off payment of RM300 to BR1M households when GST was implemented. Essential food items will be exempted from GST.

Announcing other tax reductions to offset the introduction of GST, Najib said families with a monthly income of RM4,000 will no longer have any tax liabilities, with individual income tax rates being reduced by one to three percentage points for all taxpayers to increase their disposable income. This, he added, meant that 300,000 taxpayers will no longer pay income tax.

Najib said that certain essential items, however, would be exempted from GST - essential food items, transport services including toll payments, purchase and rental of residential properties and selected financial services.

GST will also not be imposed on basic food items, piped water supply, the first 200 units of electricity per month for domestic consumers, services provided by the Government such as issuance of passports and licences, health services and school education.

Post a Comment