“If such a proposal is accepted, it will not only disrupt business operations, it will add costs and affect the recovery of our businesses,” its president Michael Kang said in a statement today.
He was commenting on remarks by Affin Hwang Capital chief economist Alan Tan earlier this year that the government was likely to look into the reimplementation of the GST.
Kang said this was not the right time to introduce any new tax due to the economic recession, noting that businesses were struggling to survive.
“We acknowledge that GST is a much better tax system than SST (sales and services tax) but it is bad timing to introduce it now as we do not foresee a business recovery to happen in 2022. We should learn from the bad experience with the implementation of the GST in 2015.
“The government should only consider the implementation of the GST when our economy recovers, possibly in 2023 or 2024.”
He also proposed that the GST be set at 3%.
The GST was introduced by the then Barisan Nasional government in April 2015 at a rate of 6%. Following Pakatan Harapan’s victory in the 14th general election in May 2018, the new government fulfilled its manifesto to abolish the GST.
Meanwhile, according to a recent survey on SMEs, about 25% of SMEs have discontinued their operation and 54% have closed temporarily due to the economic impact from the Covid-19 movement restrictions.
“In terms of the companies’ performance in 2020 compared with 2019, only 4% increased, 8% had no change and 88% declined in performance,” Kang added.
He said the government should focus on helping SMEs to recover as quickly as possible, rather than add to their burden and create difficulties for their businesses.
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