SME Association Against Suggestion to Implement GST in 2022
Malaysia’s SME Association is against the suggestion to implement the Goods and Services Tax (GST) in the year 2022 at the proposed rate of 4%.
The Association believes that this will disrupt business operations and affect business recovery costs. While the GST system is better than the Sales and Services Tax (SST) system, the Association believes it is not the right time to reintroduce this tax. Recovery is not expected to happen in 2022 yet.
GST in year 2022 is better off being postponed at this stage. The tax can be considered once more after the economy has recovered. The recovery might happen by 2023 or 2024. The Association is also recommending that the GST rate starts from 3% first.
The National Recovery Plan (NRP) Survey
The SME Association’s view of GST in year 2022 was also supported by the NRP survey. The survey was completed on 20 August this year. The findings of the survey showed that at least 25% of SMEs have ceased business operations altogether. 54% of SME businesses were temporarily ceased. The survey also found 45% of businesses were thinking about closing entirely if they could not resume operations.
More results from the survey revealed that 58% of SMEs were planning to lay off 30% of its workforce if they could not operate under the NRP. These results only highlight the fact that SMEs are still in a vulnerable state. The Association is predicting another 200,000 SMEs may close operations by the end of October, based on the survey.
Hence, the SME is against GST in year 2020 as the government should focus on helping SME’s recover as soon as possible. Adding the GST would only be added burden.
