Putrajaya will spend RM98.8 million to implement a computerised system for the Goods and Services Tax (GST), said Prime Minister Datuk Seri Najib Razak.
In a written reply to Petaling Jaya Utara MP Tony Pua in Parliament last week, Najib said the Customs Department as the implementation agency will also restructure staffing and placement of officers as preparation to implement the tax.
"GST will only replace sales and services taxes and it is not a new tax. The existing staff and facilities for both the sales and services taxes will be absorbed when GST is implemented," Najib said in his reply.
He again defended Putrajaya's decision to implement the controversial tax, saying the existing sales and services tax systems were studied and found to have weaknesses.
"The government is introducing the GST to ensure the country's taxing system to be more transparent, efficient and business friendly in line with our efforts to achieve high income developed nation status," said Najib.
In his Budget 2014 speech on October 25, Najib announced that the GST will be implemented on April 1, 2015 with a tax rate of 6%.
He said several essential food items would be exempted from the new tax, as well as public transport, financial services and education.
Putrajaya said the GST would strengthen the country's economy, and argued that a slew of measures had been put in place to help the lower-income group.
Deputy Prime Minister Tan Sri Muhyiddin Yassin had said the lower-income group will not be burdened.
"The effect on this group is neutral," he said after the tabling of Budget 2014.
GST was first announced during Budget 2005 and was originally scheduled to be implemented in 2007. It was tabled in Parliament for first reading in 2009, for implementation in late 2009, but was shelved after the move drew strong protest.
GST, also known as value-added tax or VAT, and is imposed on goods or services at each stage of the production and distribution chain. - November 3, 2013.