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Get acquainted with GST, SMEs told

[ 28-04-2014 ]
Get acquainted with GST, SMEs told

Teh Kee Sin GSTPETALING JAYA: Small and medium enterprises (SMEs) have been encouraged to attend seminars organised by professional bodies, explaining the intricacies of the Goods and Services Tax (GST).

Teh Kee Sin, president of the Small and Medium Industries (SMI) Association, said this was to ensure that SMEs will get the latest information on the tax which will be implemented in April, next year.

SMEs can be categorised as businesses in the manufacturing sector with an annual sales turnover not exceeding RM50 million or with less than 200 full time employees.

“They need to have basic knowledge of the GST as it will impact their business. At least go for the two-hour seminars,” he told FMT.

The Royal Malaysian Customs and various professional bodies are conducting GST awareness sessions, providing an overview of its mechanism

“You would not want to get caught with non-compliance (to the GST) especially since there are heavy penalties involved, would you?” asked Teh.

Teh who has attended six such seminars since Prime Minister Najib Tun Razak announced the GST during the Budget 2014 last year, said he now has better understanding on the matter.

He explained that it was important for him to have gone for these seminars, especially when his association members approached him with questions on the taxation system.

As participants have to pay a fee to attend seminars conducted by private companies, Teh urged them to go for ones conducted for free by the customs department.

Teh also encouraged SMEs to register with the customs department as taxable entities since SMEs “collect money on behalf of the government”.

Installing software

SMEs whose turnovers are more than RM500,000 annually may be required to register with the Customs Department by Dec 31, this year.

On the government’s subsidy for SMEs to purchase GST-compliant accounting software, Teh said there was no urgency in finalising the software to be used.

“The pressing issue here is registration (with the customs department). We were told that we might not necessarily need to purchase new software since some existing ones can be simply upgraded,” said Teh.

Deputy Finance Minister Ahmad Maslan, last month, announced that the government has allocated RM175 million as subsidy for the SMEs.

Fifty-five companies have been appointed to develop the software and the selling price would vary subject to different specifications.

Businesses are needed to install the software for tax details and return claims purposes.

Teh also said that SMEs were also waiting for the list of approved companies, since the list has yet to be published by the customs department.

As such, he said he was unsure how much of the software cost will be shouldered by SMEs.

In his budget speech last year, Najib announced that the GST will be implemented at a rate of 6%. Opposition leaders have branded the tax as a regressive, which will only burden the rakyat.