DAP: Many sundry shops may close due to the GST

Tawau: Many sundry shops are expected to close down soon due to the impending implementation of the Goods and Services Tax (GST), DAP Sabah Vice Chairman Chan Foong Hin claimed.According to him, many sundry shop owners who do accounting for business the old fashioned way, through manual entries into ledgers, said they found the GST too daunting and confusing to incorporate. Additionally, it is just too costly for them to hire an accountant to help with the bookkeeping.

"The traditional sundry shop owners feel reluctant to adapt to the GST implementation. They said it is too much trouble and they don't understand the whole process, so they might as well just close down the business," Chan said.

The Sri Tanjong Assemblyman claimed that at least six or seven traditional businesses in his constituency have decided to close down due to the implementation of GST on April 1.

"Pakatan Rakyat had appealed numerous times for Putrajaya to stop the GST or at least it should be deferred until Malaysia achieves high income status or else all small businesses and the people will suffer as it will inevitably lead to high inflation."

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If Putrajaya insists on introducing the tax, Chan said the threshold for traders to register with the Finance Ministry under the GST regime should be increased from the current minimum annual taxable supply turnover of RM500,000 to RM2 million.

"The move is necessary to help small traders whose costs would be increased due to the tax and devaluation of the ringgit.

Otherwise, many shops would close down when the GST implementation begins on April 1."

Chan argued that the implementation of GST hurts small traders and businesses, as the RM500,000 annual transaction threshold is just way too low, adding that many businesses may have that volume of transactions but it doesn't translate into huge profit.

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"GST implementation means a substantial increase in the administration cost for small traders and businesses. Najib should listen to the people to deal with the adverse impact of the GST implementation. It is unfair to make the common people the scapegoats of inefficient management of economy of the country, while the whole economy is in decline.

"The Federal Government should focus on making its administration competent, accountable and transparent, instead of implementing GST to make the common people at the grassroots as the scapegoats of the Government's failure," Chan concluded.

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