KUALA LUMPUR (Sept 4): An industry group has urged the government to resolve the goods and services tax (GST) refunds conundrum, saying small and medium enterprises (SMEs) are suffering cashflow problems due to the payment delay.
"If the government could even release some of the amount [owed] earlier, that would help us a lot," said Plastics & Rubber Institute Malaysia (PRIM) president Pong Kai See.
Pong said companies paid GST to the government each month with expectations that they will also receive the refunds in a timely manner.
"So the cash [is supposed to] get recycled," he told reporters on the sidelines of the International Rubber Glove Conference & Exhibition.
"But now that is no more... Our cashflow is tightened," he said, citing one example where an SME had outstanding GST refunds totalling RM700,000 in just the five-month period from February to June.
Referring to the local rubber industry, Pong said 70% of rubber glove companies are SMEs.
"For the dry rubber segment, virtually all companies are SMEs. These are the ones who are suffering the most," he said.
The rubber players, Pong said, are working with organisations like the Federation of Manufacturers Malaysia and Malaysian Rubber Gloves Association to bring the matter to the government.