News & Articles Two bodies to act against GST profiteering

Two bodies to act against GST profiteering


25 Mar 2015
Two bodies to act against GST profiteering
"Two key government outfits will be responsible for action to be taken against traders who seek to make excess profit once the Goods and Services Tax (GST) is implemented from next week, April 1.GST-Complain05

While actual enforcement against errant traders will be led by the Domestic Trade, Cooperatives and Consumerism Ministry, the Royal Malaysian Customs Department will also play a key role in identifying who the culprits are.

And fines up to RM100,000 will be imposed on traders caught indiscriminately raising prices of goods even before GST is implemented, or be jailed three years or both, under the Price Control and Anti-Profiteering Act 2011.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek said last week: “From inspections (since Jan 1 this year), 2,617 cases of hiking prices were detected involving seizures valued at RM455,861 and a collection of RM297,316 in fines.”

He urged consumers to lodge complaints with the ministry of any suspected profiteering for action to be taken against errant traders, while the Customs Department steps up its monitoring of unreasonable price hikes – based on the input tax claims submitted from next month.

Cooperation between these two bodies will show up price discrepancies based on submissions made earlier for the sales tax and service tax, and the ministry will then follow up with show cause letters asking errant traders to justify any price increase or face penalties.

Focus on anti-profiteering is expected to be especially intense this year and well into 2016 because the ministry has sent out a clear message that traders won’t be allowed to raise prices solely based on GST for 18 months from April 1 this year.

The Custom Department too is being extra vigilant as it expects to contribute far more to government revenue this year with GST collections, while also aiming to deflect widespread criticism for errors or worse, missing out on fraud.

To bolster its monitoring system, Bernama today reported that Deputy Finance Minister Datuk Chua Tee Yong said the Customs Department is now working with the UK Customs authority to help identify ‘GST fraud’.

He said the UK Customs authority, which has the experience on GST, would share the problems regarding ‘GST fraud’ which most countries which have the GST faced.

“The UK government has implemented GST since 1970s, so I think they have quite a lot of experience regarding the tax implementation such as the types of frauds that are common and the ones that require investigations and so on.”

He said the cooperation with the UK aims to help the Customs Department gather more information on GST fraud, especially on input tax claims and tourist refund claims, incidents of which are prevalent in some of the countries that implemented the tax.

Of the 193 countries in the world, 169 have already implemented the GST, Bernama reported. There had not been any major widespread protests in those countries against GST.

The mainstream, generally, accepts the GST; only the minority on the fringes would oppose it.

Even with the change of government, none of those countries, except for Ghana, had ever repealed the GST.

In Ghana, the ruling New Patriotic Party repealed the GST in 1998 due to pressures from the opposition party, National Democratic Congress.

However, when National Democratic Congress took over the government in 2000 they reinstated the GST and raised the rate from 10% to 12.5%.

Source: The Rakyat Post

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