Friday, January 27, 2012

Chua Tee Yong: GST yes, but steps must follow

November 28, 2009

NOV 28 — The government has recently announced that there will be tabling of first reading of the draft GST at the end of the December 2009 parliament session.

During the debate on the motion to support the budget for 2010 I mentioned briefly the need for the government to start the ball rolling on the implementation of GST to diversify the revenue base of the country and also to put in place a tax structure to see the country into the future.

Why is GST attractive and implemented in most countries like Singapore, Japan, Canada, Australia and New Zealand?

Basically, a value-added tax like GST is a tax on consumption, and not on income, hence the tax system inherently encourages savings and investments instead of consumption.

The tax also has a self-policing mechanism that discourages evasion, unlike in a sales tax system or an income tax system where it would be relatively easier to scheme to evade taxes. Studies have also shown that GST also captures part of the ‘shadow’ economy.

In spite of the benefits I have stressed in the budget that it is pivotal and essential that any implementation of GST should not be done in haste and any timeline suggested and targeted should take into account the current taxation framework, custom duties, sales tax or any direct or indirect tax existing in the country to avoid multiple taxation that will burden the rakyat.

Various countries that embark on GST also known as value added tax have undertaken taxation reforms but it is important note that no two economies are exactly alike.

Even the initial GST rate introduced, the type of exemptions and also the time of the economic cycle (i.e. whether the economy is in recession or strong growth) varies from countries to countries.

For example;
Canada implemented a broad based GST in 1991 at a rate of 7 per cent. The Canadian economy was in recession at the time the GST was introduced.

Japan introduced a general consumption tax from 1989 at a rate of 3 per cent. There were limited exemptions and the economy was experiencing strong growth coupled with falling unemployment

New Zealand introduced GST in 1986 at a rate of 10 per cent. When the GST was introduced in New Zealand, economic growth was weak and uneven, inflationary pressure was high.

Singapore introduced a GST in 1994 at a single low rate of 3 per cent and economic activity in Singapore at that was quite buoyant.

As such, I support the government effort to start the draft on GST, to obtain feedback, response and also to plan for the implementation of the GST.

GST implementation will definitely result in a once-off increased in inflation thus the indicated 18 months target date seems to be too fast. At a time when the economy is just in its initial stage of recovery, a hasty implemented GST would severely impact the economy, burden the rakyat, cause confusion and affect cashflow of business. A GST rate of 4 percent has been indicated as a probable GST rate.

In my opinion, the rate of 4 per cent is lower than the existing sales tax but pending the list of exemptions, potential tax cuts and also grants that will be given to the lower income group to enable to sustain their living it would be difficult to assess the reasonableness of the rate.

Besides key concerns on whether daily basic necessities, cars and residential houses would be subjected to GST needs to be addressed. Cars in Malaysia are highly taxed and additional GST without offset would burden the rakyat unnecessarily. Likewise in terms of housing, most Malaysian are still trying to cope to acquire their first homes, thus GST is unwelcome news to them.

Thus it is recommended that when determining the rate of GST the government should not target for a substantial positive GST return compared to rebate and offset provided.

This is crucial to avoid inflationary pressure that are already diminishing the purchasing power capacity of lower income families and also affecting most middle income families.

By adopting a lower rate and subsequently adjusting it when the economic situation is better it would not add unnecessary pressure to the rakyat. This is because the subsidies distribution method is still in the midst of revamping and would be crucial to mitigate the impact of the GST.

We may feel that we are ready for GST as Malaysia’s poverty rate is low. However, the reason for low poverty rate in Malaysia is because the income level per month used to determine the poverty is only RM720 in peninsular Malaysia. As such, after the GST implementation the income level used to assess poverty needs to be reassessed due to the inflationary impact.

In addition in Malaysia 38 per cent of the 5.6 million household in Malaysia has an income level of less than RM2000 a month. This shows that while GST can still be implemented the impact on 2.12million household needs to be weighed carefully as food and transport represent a high portion of their expenditure from their monthly income.

It is likely that even though a rate of 4 per cent increase in GST is introduced food prices or goods of basic necessities might increase higher than 4 per cent. Look at the instances when the subsidised price of sugar or flour prices increase, the corresponding food prices like the tarik or roti canai is substantially higher.

As such prior to the implementation the government would need to ensure the existing committee or ministry involved in the monitoring of the price of goods and service needs to be beefed up with necessary manpower and authority to avoid heavy profiteering by unscrupulous traders. If not, any implementation of GST would likely result in increase of prices of goods and services more than expected.

Nevertheless before implementing the GST, the following needs to be considered;

Setting a steering committee with the necessary political commitment
Implementation of GST is a massive tax initiative that warrants a steering committee for the following reasons:

To study the impact of GST to the people to identify and resolve operational problems to highlight the Ministry of Finance’s major concerns regarding the business community to prepare the business community for compliance to oversee the public education programme.

The job of implementation of the GST should not be limited to the Ministry of Finance.

The Steering Committee should also be represented by the Ministry of Trade and Industry, SME Department, the Department of Customs and Excise and etc
Strong political commitment is required to ensure that departments cooperate and to ensure a buy-in to make the GST successful. Without strong political backing it would difficult to get the necessary resources to assemble a steering committee with the necessary authority to carried out and monitor the implementation. Feedback from tax experts and business leader is also important to enable better preparation before the roll out of the GST.

Revamp the distribution of subsidy system and providing offset
There are various subsidies, allowances, and also benefits given to the lower income group to help alleviate the burden of the rakyat. However most of these subsidies do not reach the target group for e.g. RM720million is spent yearly on rice subsidy but sadly the poor still could not get the hands on the required quantity of rice. The government’s current initiative to use the list of names from e-kasih to distribute the rice subsidy had to be postponed as majority of those verified as requiring assistance by the Welfare department was not included.

A massive exercise is needed to revamp the e-kasih system which is plagued by red tape. e.g. the form is 24 pages and the approval process is long. It is vital to have just one database that can be used by all departments to determine the people requiring assistance. A proper system to reach out directly to those in need of assistance would enable the government to help mitigate the impact of GST.

Several offsetting measures should also be introduced to assist the rakyat to adjust to the new tax regime for example a) a cut in corporate and personal income tax b) probable cut in excise duty or import duty c) increase in public assistance by increasing the threshold of income for those to be eligible to receive the direct subsidy assistance d) increase in pensioners pay e) lower excise duty for cars

A Simple Tax System to reduce compliance cost
GST systems with multiple rates and multiple exemptions would result in confusion by both the authorities and the public. This will likely result in countless and unnecessary disputes with the businesses on the scope of tax. Multiple rates and exemptions also pose higher compliance burden on the businesses. A complex system with multiple rates could potentially lead to more abuses. Thus a single flat rate should be considered.
Meanwhile to assist SME, the government in implementing GST should ensure only SME generating a certain level of income is subject to GST. This is because not all SME have the necessary accounting or record keeping system and staff force to ensure compliance with GST. Requiring all business to register for GST would complicate the implementation.

Thus, it would be more business friendly and efficient if a high threshold is determined (e.g. businesses with turnover of RM2million and above) or low target base (e.g approximately 30 per cent of the business in Malaysia) to compulsorily register for GST. This ensures that only large businesses which should already have the necessary resources are only required to be subjected to GST.

By implementing this small retailers, neighbourhood shops and hawkers are probably exempted from registration which indirectly helps mitigate the impact of GST on the lower income groups.

Business Education and Public Communication
The implementation of the tax must be supported by a massive communication exercise to engage the business community and the general public. The authorities must be ready to organise numerous dialogue sessions, seminar, and classes on the GST.

For example dialogue sessions with trade organisation or business should be focused particular to the line of business. These dialogue sessions would enable the government to get input from the businesses regarding how the GST would fit into the actual operations of particular lines of business. This is crucial to help to fine-tune the GST in order to prevent the GST system from becoming unnecessarily complicated and affecting business adversely.

Brochures and pamphlets should be available for distribution while media and even direct mail to potential tax payers could be used to enable the public to be aware of the GST and it details.

Before implementation, field visits to selected companies are also important to assess the readiness of the business. Likewise toll free help line should also be setup to provide advise people throughout the implementation of the GST.

In addition, it important that talk programs are held at the community level through the elected representatives, community leaders and even at the grassroots level. This is to dispel any misunderstanding of the reasons why GST was being introduced. The focus should be on communicating the rationale for GST, tax offsets for GST and the exemptions if applicable.

In summary, as the details of the GST is still currently sketchy , I believe that what is essential is that the government needs to ensure that the GST is business friendly and that the necessary subsidy distribution framework is ready before the GST is implemented. The initial rate should also be acceptable and would not create a huge hike in inflation on top of the yearly CPI during the period of uncertainty. Likewise appropriate support structures to facilitate SME are also important to avoid any confusion resulting in non-compliance as SME represent 99% of the businesses in Malaysia and employs 50 per cent of the workforce.


Created 01/14/2012 - 15:14

蔡智勇:次批援助金 拉美士3200人受惠















Thursday, January 26, 2012












蔡智勇:農業部有意協助 燕窩業應拓海外市場






他說,所有燕窩業者須一律獲得政府頒發的3項認證,方可獲得“一個馬來西亞BEST”(1 Malaysia Best)標籤,以便出口至中國或其他國家,至今只有8間公司獲得獸醫局頒發的獸醫健康證書。





Tee Yong: Blend of young and old candidates needed

JOHOR BARU: The MCA should field a mix of young and old candidates for the next general election, the party’s Young Professionals Bureau chairman Datuk Chua Tee Yong said.

He said that although more of the young were participating actively, the older ones should not be overlooked.

“Senior politicians have experience while younger politicians have the energy to go down to the ground and help the people.

“By combining the talents of both groups, we will be able to come up with the best approach to help the people,” Chua, who is Labis MP, told reporters at his Chinese New Year open house at the Tenang Station multi-purpose hall here yesterday.

Also present was MCA president Datuk Seri Dr Chua Soi Lek.

Tee Yong said the bureau would wait for the final decision on the candidates chosen and “work towards addressing the needs of the people”.

“With the continuous support of the people, the Government will be able to bring about positive change to the country,” he said.

Children rewarded for good results

LABIS: UPSR 5A scorer S. Liingeshwaran never expected to be rewarded for his academic excellence at SJK (T) Cantuman Chaah with a brand new bicycle.

The Form One student of SMK Sri Bali was smiling away when he was called to receive the gift during the Ponggol celebration at his Alma Mater recently.

He was among 14 students, who scored 7As, 6As and 5As in last year’s Primary School Evaluation Test.

They received the bicycles, donated by various individuals and organisations, from guest of honour Agriculture and Agro-based Industry Deputy Minister Datuk Chua Tee Yong.

“I did not know I would be getting a new bicycle.

“It is a very nice bicycle and I will cycle it to school,” he said during an interview after the event.

Liingeshwaran said he has been cycling to school, located about one km from his house, everyday.

Liingeshwaran, whose ambition is to become a software engineer aimed for 7As, but only got5As.

“I hope I will get straight As in the PMR next,” he said.

L. Dharshinidedi, who scored 7As in the UPSR examination, was happy to receive the bicycle.

“The support of parents and teachers was very important in achieving the good results,” said the student of SMK Munshi Ibrahim.

Headmaster G. Manoharan thanked the teachers and students for their hard work.

“I’m very proud of them and hope everyone will keep up the good work,” he added.

During the event, Chua, who is also Labis MP, announced an allocation of RM20,000 for the school’s building fund to build an open air hall.

Wednesday, January 25, 2012

Families to receive one-off aid

LABIS: More than 11,000 people in the Labis constituency are expected to receive the one-off RM500 aid for families earning RM3,000 and below, said Labis MP Datuk Chua Tee Yong.

He said more than 3,000 people have received the payment so far and the rest would be getting their payments in stages.

“It is a good new start for the year for the lower income groups.

Happy families: Recipients registering themselves at the counters set up at SMK Seri Bali in Chaah to get their RM500 cash aid.
“The government will help all those eligible for the cash aid regardless of race, backgrounds and religion,” he said after presenting the cash aid to 1,099 recipients at SMK Seri Bali in Chaah on Saturday.

Chua said the Government was also fair in other areas such as awarding scholarships for students based on merit.

He said the National Higher Education Fund Corporation (PTPTN) had converted the study loans of 10,800 students who achieved first class degrees, to scholarships.

“Out of the number 8,700 are non-bumiputra students and I hope the Government will continue to allow such scholarships, to encourage more students to excel in their studies,” he added.

Later, Chua also presented a total of RM95,000 under his constituency to 18 non-governmental organisations for their annual activities, at Labis MCA division office.

Moving forward with the dragon

THE year of the dragon, synonymous with vitality, success and prosperity for the Chinese, brings much hope as it makes its entry this Monday.

Labis MP and Deputy Agriculture and Agro-based Industries Minister Datuk Chua Tee Yong who wished for stability, unity, peace and a good economy for the country, said these attributes would help the people face a challenging year ahead.

“Being resilient and willing to make improvements, especially among the youth, is another way for all of us to move foward,” said Chua who is the MCA young professionals bureau chairman. –FOONG PEK YEE






























蔡智勇:進口冷凍豬肉入口准證 解除與否新年後探討











“不介意被指靠父蔭” 蔡智勇:對自己表現有信心












Created 01/22/2012 - 19:11

Sunday, January 15, 2012









Tuesday, January 10, 2012







有意报名的学生可拨03-2166 8211或03-2161 8044,或浏览和了解详情。








Kedah now aiming for an ‘entertainment-free state’ by forcing businesses to pay a one-year licence fee

Press Statement by MCA Young Professional Bureau Chairman Datuk Chua Tee Yong
Kedah now aiming for an ‘entertainment-free state’ by forcing businesses to pay a one-year licence fee

MCA Young Professionals Bureau strongly condemns the Kedah state government for trying to change the rules for payment of entertainment licences by making businesses pay the monthly fees one year in advance, instead of the original payment i.e. monthly payment as reported by Guangming and Oriental Daily. This causes financial burden for business in the entertainment industry.
The Kedah state government is using these kinds of policies in an indirect attempt to turn Kedah into a model hardline state under PAS. Forcing businesses to pay the entire year’s cost at one go will create problems for existing businesses as well as deter others from going into the entertainment industry.
Currently, the Kedah state government has ordered that beginning from 2012, all entertainment licences, including table tennis and karaoke classes, must pay a one-year licence fee which can range from the lowest amount of RM600 to a maximum of RM15,000. Restrictions imposed on business hours, forcing the entertainment outlets to operate only between 7.00 pm to 1.00 am as well as to close their shops every Thursday, also burdens the businesses even more.
This new policy by the state government is likely to create a cash-flow problem, whereby the cost will most likely be passed onto the consumers, ultimately creating a vicious economic cycle. Therefore, the Kedah state government led by PAS should allow entertainment outlets to pay the entertainment fees by monthly installments.

DAP and PKR in Kedah – what say you?
Does DAP and PKR support this new regulation by the Kedah PAS administration because usually when they implementsany policy, DAP and PKR are usually clueless despite PKR having its elected representatives sitting in the Kedah exco.
If DAP and PKR state assembly were in the know, why didn’t they raise these issues up during state assembly sittings or state exco meetings ?

Typical PAS policy back-pedaling
As usual, when PAS formulates and implements a new policy which is meant to enforce Islamic policies onto the public, and when it is exposed by the media, they will quickly withdraw the policy. This is actually a method for them to test the public’s reactions to see if they can catch the public off guard, and if there is no strong reaction against their policy they will then use the same method to impose Islamic policies onto non-Muslims.

The Kedah state government has also previously denied turning Kulim into a non-alcohol district, by claiming that it was the district officer’s own idea. But then why has no official from the Kulim District Office been punished? This shows that PAS negating responsibility while attempting to turn the state’s policies to be ultra-conservative.

Tuesday, January 3, 2012

Dato Chua Tee Yong press statement slam Kulim DO decision to halt liquor licences- Termination of alcohol licenses in Kulim a sign of PAS hudud affecting non-Muslims

Once again, the issue of PAS hudud law affecting non-Muslims is brought to the fore with the report byThe Star today that the Kulim District Office has plans to turn Kulim into a an alcohol-free area by July this year. This is further proof that hudud law will indeed affect the daily lives of non-Muslims and the economic, social, political and academic field of our country.

 Both DAP and PKR have their hands tied

 The silence by the PAS state administration over the Kulim District Office’s decision to terminate alcohol licenses is an unspoken approval by them as it is obviously in line with their hardline policies. It also shows that the other Pakatan Rakyat parties are unable to do anything except issue statements showing their disapproval.

 If both DAP and PKR claim to be unaware of this, then it just means that PAS is taking things into their own hands and have no respect for their partners as they do not even plan to inform their partners of the decision by the Kulim District Office to terminate alcohol licenses.

 History repeats itself

 Looking back, even Selangor had the same trouble when the Subang Jaya Municipal Council had imposed a ban preventing Muslims from serving alcohol. Even though Selangor is under PKR’s administration, Menteri Besar Tan Sri Khalid Ibrahim was powerless to do anything and continuously changed his stand on the issue. I believe that the issue is still yet to be properly resolved. 

 Thus, how is it that DAP and PAS can so brazenly claim that PAS hudud law will not affect non-Muslims when perfectly good examples of it can be seen throughout the three years of administration in Kedah, Kelantan and even Selangor?