Many not claiming GST refunds, says Customs
Published on: Friday, July 22, 2016
PETALING JAYA: Very few of the 350,000 registered small to medium-sized enterprises (SMEs) registered in the country have submitted applications for refunds of the Goods and Services Tax. Customs Department Director-General Datuk Seri Khazali Ahmad said only 2,511 SMEs had submitted claims."Of that number, 65 per cent were approved and have either been paid or are under ongoing payments as claims of over RM10,000 are paid in eight installments," he said.
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"As the automated system does not tag SME applicants and if the majority of claims made by smaller businesses are lower than RM1 million, the approval rate would be higher, at 72 per cent."Khazali urged businesses that felt their claims had been wrongfully rejected to submit an application for review."If any registered SME feels their claim was unjustly rejected, they are most welcome to write in for a review and we will not hesitate to process it," he said."We do not deny there have been rejections. Every application is processed using a sampling method, in line with auditing standards."
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He said the claims may be rejected on the basis of wrongly declared amounts of quantity of goods."The proof of payments must tally with the stocks inspected. Among other reasons are inclusion of non-sales taxable items and lack of understanding of the 20 per cent recovery method."
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Khazali also said there had been several instances of attempted fraud in claims through submission of false documents and those who had tried to charge unreasonably high prices."There have been submissions by unscrupulous individuals who intended to engage in profiteering. "Of course, all such claims will be rejected outright," he said.SMEs said their income fell by at least 20 per cent since the implementation of the GST.Its President, Datuk Michael Kang, said although the decline was due to several factors, such as the freeze on foreign labour in February, GST had compounded the situation. "The exchange rate of the ringgit has dropped, making imports less profitable. Recent issues with foreign workers have also hit smaller businesses hard. They cannot cope," he said. "It has been especially acute over the last six months as consumers understand the price of good is much higher and have cut down their spending significantly."Finance Minister II Datuk Johari Abdul Ghani had denied that GST had been implemented at the expense of consumers and businesses. "If people say we are collecting additional tax from the rakyat, the answer is no," he said. "You must analyse the figures. The imported goods in this country are a lot. For most of these goods, the government is supposed to collect (Sales and Service Tax) but it was not reported to us (in the past)."Johari also said GST had streamlined tax collection and the government had been able to collect a far greater percentage of the tax owed to it.He said tax collection on imported goods had risen by 150 per cent as businesses could no longer avoid paying the tax. Kang said the poor sales and loss of income affected all sectors across the board, with many small businesses coming under intense financial pressure. "It is not confined to one sector, everyone from cottage industries to restaurants are feeling the pinch. They had to lay off staff and cut back on the variety of goods they offer," he said.On Thursday, the Associated Chinese Chambers of Commerce and Industry of Malaysia released its 2016 taxation survey report that found GST had increased costs for small businesses.The report also found 58 per cent of respondents had reported problems with cash flow and 79 per cent of those whose applications for refunds were rejected claimed they did not know why their requests were not approved. Kang said the reason for high rejections was partly because of a lack of awareness of what documentation was needed to make claims. "There had been a lot of confusion during the implementation of the tax last year. A lot of procedures and paperwork were not clear and some business owners may not understand how to make claims," he said.Stay up-to-date by following Daily Express’s Telegram channel.
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