Pic: FMT

KUALA LUMPUR: Small and medium scale enterprises (SMEs) with sales of less than RM500,000 a year are advised to evaluate and volunteer to be in the goods and sales tax (GST) system, which will bring many advantages over the long term, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said.

He said SMEs that are not in the system may lose their market share over time if larger firms decide to buy goods from businesses that are registered under the GST so as to benefit from the tax credit on inputs.

Mustapa said it is estimated that almost 25% of SMEs (around 160,000 businesses) would find themselves included in GST system at the registration threshold value set above RM500,000 a year.

There are still misconceptions about GST among businesses. So, we think there is a need for more engagement sessions. In general, businesses have accepted the GST implementation," he told reporters after a dialogue session between his ministry and national associations and chambers of commerce here yesterday.

Mustapa said the government has allocated RM150 million under the Budget 2014 to assist SMEs in purchasing the GST compliant accounting software or upgrading existing accounting software to GST compliance.

This includes encouraging SMEs to use an effective and efficient accounting system as well as to increase the compliance rate of GST, he said.

Mustapa said financial assistance is also provided by SME Corp Malaysia in the form of GST eVoucher that is worth RM1,000 each.

In addition to the allocation to purchase the GST software, he said the government is also providing GST training grants worth RM100 million to businesses to send their employees for GST training in 2014 and 2015.

Mustapa said this includes accelerated capital allowance until year of assessment 2015 for cost of purchasing ICT equipment and software, tax deduction on expenses incurred for training in accounting and ICT relating to GST for years of assessment 2014 and 2015, reduction in corporate tax rate from 20% to 19% from 2016 for small businesses and tax deduction for secretarial fees and tax filing fee from 2015.

--The Sun Daily