GST to lower cost of doing business, says Najib

KUALA LUMPUR: Prime Minister Datuk Seri Najib Abdul Razak said the Goods and Services Tax (GST), which comes into force today, will benefit Malaysian firms as the cost of doing business will fall as they recover input taxes.
Najib said the GST was a key part of the biggest series of tax reforms in the country's history as the aim was to make the taxation system more efficient, effective, transparent and business-friendly.
"This is good news for the halal industry, since most of the ingredients — fish, meat, poultry, vegetables and the like — will incur zero GST," he said at the launch of the Word Halal Summit 2015 (WHS 2015) here today.
He said the implementation of the new tax regime has gone through rigorous and detailed study for over 30 years to ensure that Malaysia would achieve high-income status by 2020.
Najib said 4,000 goods were classified as exempted and zero-rated under GST.
On the halal industry development, he said, the halal economy was currently estimated to be worth RM8.4 trillion (US$2.3 trillion), of which halal foods made up RM2.5 trillion (US$700 billion).
He said the opportunities for the halal industry were enormous given that the Muslim population worldwide, currently at 1.6 billion, or 23% of the global population, was expected to rise to 2.2 billion people, or 26% of the global population by 2030.
Najib said as the Asean chairman this year, Malaysia was keen to encourage the promotion and development of the halal industry in the region.
"With the establishment of the Asean Economic Community by year-end, there is no reason why Asean should not become a major halal trading hub, serving both home markets and those around the globe," he said.
Meanwhile, Najib said Malaysia has made great strides in seeking to achieve its ambition of making the country the global halal hub and was now in the process of entering the final phase of the Halal Industry Master Plan.
The prime minister said while food and beverages still dominated the halal industry, the potentials in other areas were also vast, such as pharmaceutical and finance sectors.
He said a pharmaceutical company from Saudi Arabia, Al Jomaih Group, has invested in a facility in Nilai, Negri Sembilan and was working closely with Malaysia's Halal Industry Development Board to develop halal vaccines.
Another area, he said, was Islamic finance, which, over the last decade, has steadily increased its share of the global marketplace and currently comprised at least 700 Islamic financial institutions operating across more than 70 countries.
Najib said Islamic finance that offered great promise was syariah-compliant-micro-credit.
He said the Islamic concept micro-credit offered hope for millions of Muslims in developing countries who currently lacked access to conventional banking.
He said Islamic micro credit provided an ethical Islamic means for Muslims to fulfil their scriptural obligations to fellow members of the ummah.
"Not only is the available market huge, but the need is pressing," he said.
The seven-day WHS 2015 summit, themed 'Enhancing the Global Halal Movement', starts on Monday.
It is designed as a platform to provide opportunities for halal-industry stakeholders to collaborate, network, discuss and present viable ideas for the expansion and promotion of the industry as well as to overcome the challenges it faces. – Bernama