KUALA LUMPUR: Companies should continue to maintain records post-abolition of Goods and Services Tax (GST), as tax audits can be expected upon deregistration, which may take place up to seven years from the time of supply, said Ernst & Young Advisory Services Sdn Bhd (E&Y).
Though the GST has been zero-rated, its rules and obligations continue to apply, including the filing of returns, issuance of tax invoices, claiming of input tax credits (where applicable) and bad debt adjustments, it said.
“Businesses need to understand the impact of zero-rating on pricing and the tax system, among others,” said E&Y Asean Tax Managing Partner, Yeo Eng Ping in a statement.
Prime Minister Tun Dr Mahathir Mohamad has issued an order for the GST to be zero-rated from June 1, 2018, to be followed by the reintroduction of the Sales and Service Tax (SST).
The transition from GST to SST would require careful management, E&Y said, adding that organisations need to deploy sufficient focus and resources to ensure a smooth transition.
“We also anticipate refinements of tax incentives to encourage the right investments in Malaysia which can spur the country’s transformation into the new economy.
“It is hoped that the introduction of the new SST will be done in a manner that is sensitive to business operations and mindful of resource and costs associated with change,” said Yeo.
E&Y also anticipated some policy shifts in due course, including a comprehensive review of tax policies and framework as the government deliberates its implementation and fund social and development plans, while keeping tax rates competitive. -- BERNAMA