THE Associated Chinese Chambers of Commerce and Industry of Malaysia is urging the government to make timely refunds of the input tax paid by companies under the Goods and Services Tax that was implemented five months ago on April 1. A delay, it says, would create cash-flow problems, adversely affecting their business operations.

“We need to sit down with the authorities to find the best way to resolve GST issues, especially the delay in getting input tax refunds,” ACCCIM’s newly elected president, Datuk Ter Leong Yap, tells digitaledge Weekly.

Many businesses have yet to receive their refunds despite having submitting their claims at least three months ago.

According to the Royal Malaysian Customs on Aug 24, 96% of April’s refunds and 90% of May’s refunds have been paid to date. And on Aug 17, Deputy Finance Minister Datuk Johari Abdul Ghani was reported as saying that over 92% of companies had received their refunds. He explained that one of the reasons for the delay was the filing errors made by the businesses.

Nevertheless, ACCCIM, which represents the Chinese business community in the country, thinks there is room for improvement.

Ter acknowledges that ACCCIM had indeed been informed by RMC that over 90% of the refunds had been paid. However, he says, the association expects 100% of the refunds to be paid and that too within the period stipulated by the law.

Under GST Regulations 2014, the refund of input tax has to be made within 14 working days of online submission of claims or 28 working days of manual filing.

“Refunded doesn’t mean refunded on time. If you’re supposed to make the refund within 14 or 28 days but you do it only on the 15th or 29th day, that is not good enough,” stresses Ter. “Imagine, if we don’t pay GST by the deadline, even if it’s just one day late, we are penalised. So, I wouldn’t say it’s unfair but it’s not appropriate.”

In a survey by ACCCIM, about 61% of the respondents say their cash flow has been affected by GST while half of them state that they are facing problems in claiming the refunds (see chart).

Entitled “GST implementation in Malaysia”, the survey was conducted from June 20 to July 31 and polled 963 business operators across the country.

The survey also shows that 85% of the respondents have been forced to request longer credit terms of above six months from their suppliers post-GST as the input tax refunds from Customs are often delayed. Those whose cash flow has been most affected are in agriculture, timber, fishery, farming and gardening as well as wholesale and retail.

ACCCIM has 17 constituent members located separately in 13 states of the nation. Its direct and indirect membership of all constituent chambers totals more than 100,000, representing Malaysian Chinese companies, individuals and trade associations.

Ter took the helm of ACCCIM from its past president Datuk Lim Kok Cheong after the annual general meeting and election in July. The office bearer’s tenure is three years.

Under the new leadership, ACCCIM has formulated a nine-pronged plan for 2015-2018 (see table). One of the most important tasks, says Ter, is to computerise its membership database.

“Today, when we do a business matching session with China, it takes us six months to get our members’ data. In this era, it’s not going to work that way. We need to have a strong database with a powerful system. This will be an uphill task because some data is so old but we are determined to do it.”

Ter adds that ACCCIM needs to have a strong relationship with the government at all levels so that its views are heard even better. The commerce body also wants its own economic blueprint and plans to organise conferences every year.

It is worth noting that the 51-year-old Ter is the founder and executive chairman of Sunsuria Bhd. He is the single largest shareholder of the property firm with a 62% stake.

Currently, Ter also serves as the president of the Chinese Chamber of Commerce & Industry of Kuala Lumpur & Selangor as well as a director of Bank of China (M) Bhd.

Commenting on the weakening ringgit, he says most businessmen would prefer a stable currency to run their business. However, business owners should not go into a state of panic but take this opportunity to strengthen their companies. “Obviously, companies are now more cautious about their spending; it is a good time for them to consolidate. During the good times, you don’t really look at improving efficiency and increasing productivity. But now, it’s easier to push the employees to be more efficient,” he says.

This article first appeared in digitaledge Weekly, on August 31 - September 6, 2015.