GST LIKELY TO BE IN NEW ECONOMIC MODEL, SAYS MIA

By Nor Baizura Basri

KUALA LUMPUR, July 9 (Bernama) -- The government is likely to consider
including the goods and services tax (GST) in the country's new economic model
as a move to diversify the revenue base, particularly in cushioning impact of
the global economic crisis.

The Malaysian Institute of Accountants (MIA), in stating this, said for the
time being, the GST will not be in the picture as the government is giving more
emphasis to the people's interest.

"We have to get the recovery to happen to ensure that the people have a
higher disposable income and maybe that is when we can consider introducing the
GST," MIA president Nik Mohd Hasyudeen Yusoff told Bernama recently.

According to him, there is a need for Malaysia to diversify the revenue base
and one of the ways is to basically broaden the tax paid and the GST is an
option that the government is considering.

"I suppose we need to put in place the GST to ensure that our reliance on
petroleum can be mitigated through a broader tax base. I believe the challenge
when they introduce the GST is that there will be an initial impact of some
inflationary pressures," he said.

He added that when the economic situation becomes more stable, people are
more likely to be able to absorb the impact when the GST is introduced.

The GST, which was originally scheduled to be implemented in 2007, is aimed
at diversifying the country's sources of revenue, which now comes mainly from
the sales of petroleum.