MALAYSIAN GOVT LOOKING AT WAYS TO MAKE TAX STRUCTURE COMPETITIVE, SAYS MINISTER

KUALA LUMPUR, Feb 11 (Bernama) -- The Malaysian government will continuously
look at ways and means to make the country's tax structure regionally
competitive, Second Finance Minister Husni Mohamad Hanadzlah said Thursday.

"We have reduced our coporate tax and we have shown to be willing to reduce
personal income tax in specific instances, such as for the Iskandar Region," he
said.

Therefore, the introduction of goods and services tax (GST) was a sub-set of
an altogether holistic approach that the government was undertaking to ensure
that Malaysia's fiscal footing was on firmer ground, he added.

So far, more than 140 countries had successfully implemented GST or value
added tax (VAT), he said in his opening address at the National Conference on
GST: Roadmap to Malaysia's New Taxation System here.

The GST implementation in Malaysia would see businesses save RM4 billion
while exporters up to RM1.4 billion (US$1=RM3.4) under the 'zero-rate' system,
he said.

The Finance Ministry is presently looking into introducing GST at a rate of
four percent to replace the existing sales and services tax (SST). It is
expected to be finalised once Parliament passes the Bill.

The government is expected to collect an additional RM1 billion in revenue
annually after the first year of it introducing GST.

Husni said the Malaysian GST model was being carefully formulated, taking
into consideration the interests of the population at large, especially the low
income group.

"Certain basic goods and services will not be subjected to GST. These
include basic foodstuffs, residential accommodation, education, health services,
public transportation and domestic consumption of water supply and electricity,
up to a certain limit.

"Moreover, the relatively low tax rate of four percent is indicative of the
government's effort to minimise the impact of the tax on the end consumer," he
said.

-- BERNAMA