GST: Customs must stop harassing small businesses

Media statement by DAP National Political Education Director and MP for Kluang Liew Chin Tong on 3rd April 2015 in Kluang:

I call on Finance Minister Datuk Seri Najib Razak to instruct the Customs Department to halt all enforcement activities and focus on hand-holding small businesses to adapt to GST collections.

In my visits to shops in Kluang, Johor this morning, small businesses complained of hostile inspections with an intention to find fault by Customs enforcement officers.

In Sabah, DAP State Assemblyman for Likas, Junz Wong, informed me of raids by Customs officers at 1a.m. on 1st April 2015 on several eateries in Lintas, Kota Kinabalu. It just borders on ridiculous.

GST is an administrative burden on the businesses which increases the transaction cost to the extent that many small businesses found it not worthy to operate anymore.

The Finance Ministry and the official media outlets have tried to perpetuate two myths:

First, that after GST there will be a fall in the prices of goods just because there is no more sales tax; and

Second, that if there is price hike it is due to recalcitrant businesses trying to make extra profits and has nothing to do with GST.

A simple fact that most Malaysians knew by now is that GST will push up costs on all fronts as even insurance premium now requires payment of GST.

But armed with this “profiteering businesses” narrative, Customs officers have been busy harassing small businesses since 1st April. This must stop.

The Finance Ministry and the Customs are culprits themselves in this national mess of GST implementation.

Tony Pua, DAP MP for Petaling Jaya Utara, put it very well that “the confusing, cumbersome and costly world’s longest list of GST zero-rated and exempted items is exactly the reason why Malaysia is not ready for its implementation.”

Most businesses are basing their “List of Taxable and Non-Taxable Goods” (Senarai Barang Bercukai dan Barang Tidak Bercukai) published by the Customs on 2nd January 2015.

But the “Goods and Services Tax (Zero-Rated Supply) (Amendment) Order 2015” issued on 27th March 2015 has a far more extensive list of zero-rated goods.

This last-minute change causes so much difficulties. Even for this reason alone, the Finance Ministry should have halted any enforcement activities until the dust settles.

Even big corporation like 7-Eleven made a mistake by charging newspaper GST which goes to show that small businesses need hand-holding, not aggressive raids.

Liew Chin Tong