Reflections on Budget 2017

The hoopla over the annual budget has come and gone. And while some good measures were announced,Budget 2017fails to reckon with one of the country’s most pressing issues: the shrinking domestic demand ravaged by the GST and depreciating ringgit.

THE year 2017 has been declared “Startup and SME Promotion Year” by the Malaysian Government when the Prime Minister tabled Budget 2017 a few weeks ago.

Under the budget, a total of RM6.7bil (2.57% of total allocation) has been allocated for SME development through the following key measures:

Anti-profiteering mechanism should be removed

The concept of “price” is more difficult than what is usually seen at the superficial level. In practise, most people would think that price is simply what the seller puts on the price tag. But how does the seller know what numbers to put on the price tag?

If you want to sell your old car, for example, the first thing most people would do is to check what the “market price” is.

You can do this by surfing the internet and checking the prices of similar cars. Or you can also check the prices at used car dealerships. These will help you know what other people are charging and you can then decide how much to sell your car for.

OECD economist praises Putrajaya for GST, tax reform initiatives

PUTRAJAYA, Nov 11 ― The federal government’s introduction of the Goods and Services Tax (GST) to shield Malaysia from volatile economic forces is commendable, an official from the Organisation for Economic Co-operation and Development (OECD) said today.

“We think that the reform and the introduction of the GST was very important for Malaysia for one simple reason, the commodities are vulnerable to the fluctuation of the oil prices, which means that your revenue falls,” OECD director of country studies for the economics department, Alvaro Pereira told a news conference here.

Without taxes like the GST, it would be difficult for Malaysia to withstand Putrajaya’s revenue shortfall, he said.

“That’s why it is so important and we commend the government for the courage for taking the GST reform.

“It is very important that to continue to work on this and other areas, but it is very important especially to reduce the vulnerabilities form the external changes in oil prices,” he added.

Pereira had earlier attended the presentation of two OECD reports on Malaysia to Chief Secretary to the Government Tan Sri Ali Hamsa at the Finance Ministry here ― the Economic Surveys: Malaysia 2016 and OECD Reviews on Innovation Policy: Malaysia 2016.

In its reports, the OECD advised Putrajaya to gradually reduce exemptions and then raise the GST rate from its current 6 per cent and to increase income tax “over the medium term”.

Asked to comment on the OECD’s recommendation, Ali only said the government will look into it for the longer term, but asserted that the GST rate will remain unchanged for the time being.

the source:

Govt working on mechanism to detect GST dodgers

KUALA LUMPUR, Nov 9 — The government is identifying a new mechanism to detect traders who avoid paying the Goods and Services Tax (GST).

Second Finance Minister Datuk Johari Abdul Ghani said the mechanism would link the cash register machines of the traders to the system of the Royal Malaysian Customs Department (JKDM). 

3% GST plea for domestic travel in Sabah, Sarawak

KOTA KINABALU: The Congress of Unions of Employees in Sarawak’s public and civil service (Cuepacs) want airlines to adopt a low-fare policy throughout the year.

In calling for the GST to be reduced to 3 per cent for the domestic sector, Sabah Minister of Tourism, Culture and Environment Masidi Manjun pointed out that domestic tourism in Sabah dropped by 0.4 per cent for the period January to July this year compared with the same period last year.