75% prefer new tax system but worried over challenges in adoption and impact on revenue
Calls for more financial and training support to smoothen implementation and adherence
MOST local businesses (75%), primarily from the IT sector, believe that the new Goods and Services Tax (GST) system is a better form of indirect tax compared with the current Sales and Service Tax (SST) model, according to a survey by the National ICT Association of Malaysia (Pikom).
The survey was carried out to identify market sentiments and readiness for the GST, which goes into effect April 1, 2015. It was conducted in March with over 1,000 local organisations nationwide, primarily within the IT fraternity but also including businesses across other industries, Pikom said in a statement.
“[The] GST Survey gathered that local organisations already have some basic knowledge about the impending GST system,” said the association’s chairman Cheah Kok Hoong (pic).
“This is likely mainly attributed to the effective advocacy and awareness programmes that have been driven by the Government, together with select members of the private sector,” he added.
However, Pikom’s GST Survey also reported that less than 50% (or half) of local organisations admit that they are ready to adopt the new GST system from the perspectives of workforce, IT systems and business processes.
“Most shockingly is that as of now, less than 25% (or a quarter) employers have sent their ICT employees to be properly trained to implement and leverage the new GST system,” said Cheah.
Local businesses, especially small and medium enterprises (SMEs), have started feeling the pressure to expedite their GST system implementation process in order to meet the April 1, 2015 deadline.
“At this stage, many organisations have found out themselves that they have only allocated a limited budget, and possess inadequate resources and knowledge, to properly get themselves ready [to face] the far-reaching operational and financial impact of a new tax system in their business,” he said.
He added that the survey results also show that more than 60% of local organisations acknowledged that the GST system will significantly impact their revenue.
Other key findings:
There is a clear market demand for more financial and training support to implement GST;
Other significant requirements include guidance and support on business process automation and technology to embrace GST quickly and efficiently;
Over 60% of local organisations have a GST project plan; and
Over 70% of local of organisations indicated that their employees need (more) training to perform GST system implementation and manage the impact on business operations.
“The highlight from this survey is that Malaysian organisations are looking for more alternatives for financial and training support from local companies and government agencies to achieve a better success rate for their in-organisation GST system implementation projects,” said Cheah.
“In addition, they are also actively turning to ICT vendors to seek consultation to optimise existing organisational infrastructures to comply with the new GST system.
“On a positive note, Pikom is clearly seeing that local ICT organisations are playing an important role in ‘cushioning’ the impact on local businesses … by leveraging their expertise and track record of GST implementation in other countries,” he added.
Cheah said Pikom has planned a series of seminars and workshops to provide “a softer landing” for businesses and consumers.
“We are planning to offer business and consumer ICT consultation and solutions during the Digital Lifestyles Expo, which will be at the KL Convention Centre from Aug 8-10,” he added.
Time is running out, start the GST journey now
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