FOR IMMEDIATE RELEASE
Malaysian Businesses Look Forward To New GST System
a) A majority of local organisations (75%) prefer new tax system but voice worry over challenges in adoption and impact on company revenues;
b) Calls for more financial and training supports to smoothen implementation and adherence to new GST system
c) Local ICT vendors play an important role to ‘cushion’ the complexity of GST- system adoption and compliance
Kuala Lumpur, 28 April 2014 – PIKOM, the National ICT Association of Malaysia and the ‘Voice of ICT Industry’, today unveils some significant findings from its recent nationwide ‘GST Impact on Businesses’ Survey – carried out with the main purpose of identifying the market’s sentiments and readiness for the country’s impending Goods and Services (GST) system to be enforced on 1st April 2015.
PIKOM’s Chairman, Cheah Kok Hoong shares that PIKOM’s GST survey conducted in March 2014, markedly revealed that a majority of local businesses (75%) perceived and accepted that the new GST system is a better form of indirect tax compared to the current Sales and Service Tax (SST) model.
“PIKOM’s GST Survey gathered that today’s local organisations already have some basic knowledge about the impending GST system such include the zero-rated supply, exported goods exemption, non-compliance regulation, penalties and more,” says Cheah.
However, PIKOM’s GST Survey also reported that less than 50% (or half) of these local organisations admit that they are ready to adopt the new GST system from the perspectives of workforce, IT system and business processes.
Cheah also shares, “Most shockingly is that as of now, less than 25% (or a quarter) employers have sent their ICT employees to be properly trained to implement and leverage the new GST system.”
Organisations Seek for Supports as GST Posts Significant Impacts on Revenues
Cheah further shares that local businesses, especially Small and Medium Enterprises (SMEs), have started feeling the pressure to expedite the GST system implementation process in order to meet the given deadline of April 1, 2015.
“At this stage, many organisations have found out themselves that they have only allocated a limited budget, and possessed inadequate resources and knowledge, to properly get themselves ready in facing the far- reaching operational and financial impact of a new tax system in their business,” he says – adding that survey results have also further shown that more than 60% of local organisations acknowledged that GST system will significantly impact their revenues.
Some of the other key findings in PIKOM’s GST Survey are the following:
1. There is a clear market demand for more financial and training supports to implement GST system
2. The market’s other significant requirements include guidance and support, on the aspects of business process automation and technology, to embrace the GST system quickly and efficiently
3. Over 60% of local organisations have a GST project plan
4. Over 70% of local of organisations indicated that their employees need (more) training to perform GST system implementation and manage the impact to the business operations
Cheah says, “The highlight point from this survey is that Malaysian organisations are looking for more alternatives for financial and training supports from local companies and government agencies to achieve a better success rate for their in-organisation GST system implementation projects.”
“In addition, they are also actively turning to ICT vendors to seek consultation to optimise the existing organisational infrastructures to comply with the new GST system. On a positive note, PIKOM is clearly seeing that local ICT organisations are playing an important role to ‘cushion’ the impact of local businesses trying to deal with the complexity of GST-readying their systems, by leveraging their expertise and track record of GST implementation in other countries.”
Cheah ends that in PIKOM’s role, the association has planned a series of seminars and workshops to provide “a softer landing” for businesses and consumers.
“In line with PIKOM’s effort to advocate the GST system implementation, we are planning to offer businesses and consumer ICT consultations and solutions during the Digital Lifestyles Expo, which will be at KL Convention Centre and is scheduled from 8th to 10th August, 2014.”
“Overall, despite the adoption challenges, organisations are still proactively putting efforts to keep the GST project moving as they are well aware of its importance and impacts to business on a long term basis.”
The PIKOM’s survey was conducted with over 1,000 local organisations nationwide, primarily the IT fraternity and other businesses across industries.
PIKOM, THE NATIONAL ICT ASSOCIATION OF MALAYSIA is the association representing the information and communications technology (ICT) industry in Malaysia. Its membership currently stands at over 1,000 comprising companies involved in a whole spectrum of ICT products and services which commands about 80% of the total ICT trade in Malaysia. PIKOM works to improve the business climate in the interests of all its member companies and to promote industry growth in line with national aspirations. PIKOM’s membership is open to all Malaysian companies who supply ICT products and services in the computing and telecommunications industries. However, non-ICT companies are also welcome to join the Association as associate members.
Pi PR Consultancy Sdn Bhd