SUBANG JAYA: The goods and services tax (GST) which takes effect today is no April Fools’ joke by the government, Datuk Ahmad Maslan said yesterday, adding that the tax system was proven to reduce the price of goods.

The deputy finance minister cited the move by hypermarket operator Mydin to absorb the 6% GST, saying it proved he had not lied during Putrajaya’s public briefings on the new tax system.

“I want to tell you it is not an April Fools’ joke. GST will be implemented.

“All this while, people have derided my ceramah, but when the enforcers and traders say such things, that is the true GST,” said Ahmad after visiting the Mydin hypermarket in Subang Jaya, Selangor, yesterday.

Ahmad said the implementation of GST would result in lower prices of goods generally because the consumption tax would replace the current sales and service tax, which ranges from 5% to 10%.

The final price of goods for consumers should not include the GST if businesses which register for the new tax claim back the 6% tax on their input to goods, he said.

Consumers should use their collective power to ensure that prices are kept reasonable, Ahmad said.

Separately, Deputy Finance Minister Datuk Chua Tee Yong told reporters in Parliament that it would take about six months for all parties to adjust to the GST implementation.

The consumption tax will be imposed on a wide range of goods, with exemptions on public transport and healthcare. However, a lack of clarity in enforcing the GST in the private healthcare industry may still see higher cost of treatment in this sector, while there is also confusion over which medicines can be considered exempt. — The Malaysian Insider

This article first appeared in The Edge Financial Daily, on April 1, 2015.