“It is not a question about whether or not the GST should be implemented or the tax rate. It is the complexity of complying with the law,” said PricewaterhouseCoopers Taxation Services Sdn Bhd’s tax leader and senior executive director Khoo Chuan Keat.
Khoo said while the government was planning to impose the GST at four per cent, it should also consider the three components of paying taxes — the amount of time spend on complying with the law, amount of payments, and effect on the total tax rate.
“It is very important that when GST comes in, there should be online filing and online payment so that we don’t have a lot of documents that need to be filed,” he said here on Thursday.
Studies have shown that reducing complexity for filing, paying and reporting will increase the compliance rate, resulting in increased government revenue.
Citing an example, Khoo said Malaysia could emulate Ireland which was now taking an average of 30 hours to file tax return and payment compared with the Czech Republic which was taking 178 hours.
“When we implement the GST, we must be on the Ireland side or even better if it takes less than 30 hours,” he said.
Khoo also said that Malaysia should follow Singapore’s strategy in giving rebate and reducing both personal and corporate taxes when it introduced the GST.