KL to impose GST

A BILL to introduce the goods and services tax (GST) will be tabled in the Malaysian Parliament by the year-end, as the government signals that it will push ahead with this politically sensitive revenue-raising option.

Prime Minister Najib Razak said on Tuesday the Cabinet had agreed to the tabling of the Bill for the first reading, to enable the government to gather feedback.

Under the Malaysian system, a Bill is tabled for two readings before it is debated and voted upon by the Lower House. It then moves to the Senate for a vote.

Mr Najib, who was in New York to meet investors, was quoted by the Bernama news agency as saying that the government will introduce GST 'very gently' if it decided to do so. 'It's not going to be an abrupt introduction,' he said, pledging that it would not burden the poor or middle class, or lead to rampant inflation.

The proposed GST would replace the sales and services tax now imposed on companies with an annual turnover ranging from RM150,000 (S$61,500) to RM500,000.

This is the second time that the government is attempting to introduce the GST. It had announced in Budget 2005 that the new tax would be implemented in 2007, but backed down after a public outcry.