Lim: Delays in GST refunds led to higher prices of goods

19 Jul 2018 / 14:52 H.

    KUALA LUMPUR: Delays in refunding claims for the Goods and Services Tax (GST) have led to businesses factoring in the yet-to-be refunded tax into the final prices of goods and services, according to Finance Minister Lim Guan Eng.
    Speaking at a press briefing at the parliament today, Lim said this in turn, has led to the increase in prices.
    The Sales and Services Tax (SST) is a single stage tax whereas the GST is a multi-layer tax that goes through several stages of the supply chain.
    "Technically each supplier can claim back GST as an input tax from the government. Nonetheless, this still causes a huge problem with operating cash flow for many businesses as the (former) government has been notoriously slow in refunding GST claims. This has resulted in higher costs, and ultimately the end customers would have to bear the cost with higher prices for goods and services," he explained.
    Lim said he will reveal the real reason for the previous government's failure to repay refunds promptly, on a later date.
    Defending his stance on why the SST is less of a burden to the people compared with the GST, Lim said the new tax regime which will come into force on Sept 1, only covers 38% of the consumer price index (CPI) basket of goods whereas the GST covers 60%.
    Among the goods and services that were subjected to GST but will be exempted from SST are, medical insurance, 250cc motorcycle, infant formula milk, doctor's consultation fee at private hospitals, sardine, theme park and cinema tickets, bank transaction fee, maintenance services and spectacles frame.

    thesundaily_my Sentifi Top 10 talked about stocks