malaysia
Customs refutes Dr Mahathir’s claims that GST forcing companies to close shop
Customs deputy director-general Datuk Subromaniam Tholasy today rejects suggestions that GST had forced companies to close shop or move overseas. – The Malaysian Insider pic by Seth Akmal, March 10, 2016.The Customs Department today rejected claims that companies are closing shop and moving overseas due to the goods and services tax (GST).
Customs deputy director-general Datuk Subromaniam Tholasy said such claims did not make sense as some of Malaysia’s neighbours had higher GST rates.
"Where are these companies going to go? They will end up moving into other countries where the GST rate will be higher. The GST is implemented to make the cost of doing business lower.
"The claim that businesses are moving out of the country does not make sense. These claims must be based on fact and reality,” Subromaniam told reporters in Kuala Lumpur today.
Former prime minister Tun Dr Mahathir Mohamad claimed last week that GST was driving companies to shutter and move their operations overseas.
Dr Mahathir, a staunch opponent of Datuk Seri Najib Razak, made the claim when launching the “Citizens' Declaration” on March 4 to oust the prime minister.
Subromaniam said he was not directly criticising anyone in particular but was refuting unsubstantiated claims and perceptions by critics of GST.
"If anyone wants to give a statement, that statement should be based on facts. Please do not make sweeping statements," Subromaniam said on the sidelines of a talk on GST by audit and tax advisory firm Grant Thorton.
He added that much of the criticism on GST was based on perception.
Grant Thorton senior official, Lorraine Parkin (pic, left), said recent data had challenged claims that businesses were leaving the country due to GST.
"Data from various sources has shown that the opposite is true. Foreign direct investment into the country increased last year even with the GST," said Parkin, who heads the company's indirect tax division for the Asia Pacific.
"This is because the GST is a transparent tax system and makes a country a more attractive place to invest," she said. – March 10, 2016.
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