Skip to main content

Advertisement

Advertisement

KL Customs rapped for subjecting more items to GST without approval

PUTRAJAYA — In a stern rebuke to the Customs Department, Malaysia’s Second Finance Minister Johari Abdul Ghani said that the imposition of Goods and Services Tax (GST) on new items must be approved by the Cabinet.

PUTRAJAYA — In a stern rebuke to the Customs Department, Malaysia’s Second Finance Minister Johari Abdul Ghani said that the imposition of Goods and Services Tax (GST) on new items must be approved by the Cabinet.

His comments came after the Royal Malaysian Customs said it would impose GST on 60 additional food items from July 1, before abruptly cancelling the tax. “The items are not supposed to be subjected to GST at the moment. I have to tell it to the customs authorities that each item to be subjected to GST should be brought to the level of the Ministry of Finance, and we will bring it to the Cabinet,” said Mr Johari during an iftar ceremony at his ministry on Monday.

“It cannot impose (GST) without the approval of the Cabinet.”

Malaysia first imposed the consumption levy of 6 per cent in April 2015, despite the idea of a new tax being unpopular. Consumers have felt the pinch, especially with a weakening ringgit, and opposition parties have held anti-GST rallies.

The government collected RM38.5 billion (S$12.4 billion) in GST last year and expects to collect RM40 billion this year. Prime Minister Najib Razak has characterised the GST as a “saviour” of the Malaysian economy, helping to make up for lower revenue from cheaper crude oil exports.

Local media had reported that more than 60 zero-rated food items would be subject to the 6 per cent GST from July 1, after the order was gazetted on June 6. Under the order, food items such as eel, swordfish, corn, frozen vegetables and imported fruits like avocados, apricots, figs, grapes, nectarines, cherries and berries would have been subject to the tax.

Customs Department director-general Subromaniam Tholasy was quoted as saying that these items were not consumed by the masses.

The announcement resulted in backlash from the opposition and the public.

In an abrupt U-turn following the outcry, Mr Subromaniam issued a statement on Monday saying that the department has annulled the decision after consulting the Finance Ministry.

Mr Johari implied the Customs Department had jumped the gun —saying the proposed imposition of the GST was made at the department level without being referred to the ministry to be finalised.

Opposition lawmaker Rafizi Ramli yesterday accused the minister of making the Customs Department a scapegoat.

Mr Rafizi, who is the vice-president of Parti Keadilan Rakyat (PKR), furnished parliamentary records showing the proposal was mooted by Mr Najib, who is also the Finance Minister at the last parliamentary session held between March and April.

“It is irresponsible to blame the department every time the people complain about the GST as the decision to implement it comes from the Finance Ministry. The department merely carries out the instruction,” he said in a statement. AGENCIES

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.