19 May 2019, Sunday | 03:37pm

Refund outstanding GST input tax before implementing SST - FMM


KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) is urging the government to return the outstanding GST input tax refunds to businesses before it imposes the Sales and Services Tax (SST), which is set to be enforced on September 1, 2018.

“While we appreciate the Minister of Finance’s candid and transparent announcement that the Government owes businesses RM19.4bil in GST refunds, FMM hopes for the approved refunds to be channelled back to members as soon as possible,” it said in a statement.

The federation also urged the government to ensure that all pending cases on special sales tax refunds since the enforcement of the GST in 2015 are reviewed and closed before the SST 2.0 is implemented.

“We urge the Ministry of Finance to have a dialogue with stakeholders affected by the outstanding GST related refunds to determine practical solutions to resolve this critical issue.

“We also require Government’s assurance that there will be no offset of GST credit for future SST payments,” it said.

The group said it has received numerous complaints from its members on the outstanding GST input tax refunds.

Based on feedback received from over 100 FMM members to its survey conducted in July 2018, it said the companies collectively had yet to receive over RM220mil in input tax refunds.

“If FMM’s over 3,000 direct member companies are taken into consideration, the amount of refunds overdue to manufacturers could be much bigger.

“The delay in refunds has caused serious cash flow issues for our members, especially SMEs, and continues to hurt exporters,” it said in a statement.

To assist businesses with the transition from the GST to SST regime, FMM also proposed a waiver of penalties on mistakes made during the initial implementation of SST. 

It said exceptions to the waiver should only be targeted at parties who were intentionally trying to defraud the government.

“We also urge the government to be vigilant in monitoring loopholes and applying strict enforcement with respect to black economy activities, illicit capital outflows and tax avoidance under the SST regime,” it added.



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