Malaysia’s SME association against GST implementation in 2022
Malaysia’s SME Association is against the implementation of the goods and services tax (GST) in 2022.
“If such a proposal is accepted, it will not only disrupt business operations, but it will add costs and affect the recovery of the business,” said president Datuk Michael Kang.
“We acknowledge that GST is a much better tax system than [the sales and services tax] SST but this is a bad timing to introduce as we do not foresee a business recovery to happen in 2022,” he added.
Kang said that the government should only consider implementing the GST when the country’s economy recovers, possibly in 2023 or 2024, noting that “we suggest that the tax rate should start at 3% instead of 4%, as proposed by some parties”.
A recent survey conducted by the SME Association found that 25% of SMEs have discontinued business operations, 54% of SMEs have either closed temporarily or ceased operations, and 45% of businesses will consider temporary or permanent shutdowns if they are unable to start operations immediately.
The association said that SMEs were in their most vulnerable stage and would likely shut down if the economy remained closed.