Thursday 28 Mar 2024
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KUALA LUMPUR: Residents staying in landed properties with gated and guarded facilities will be subject to 6% goods and services tax (GST) on their maintenance fees, says Cheras MP Tan Kok Wai. The DAP politician said although the rule only applies to security companies that earn more than RM500,000, it is still unfair as residents mainly choose to live in gated communities for safety reasons.

He urged Putrajaya not to make the people pay additional tax for a service as basic as security. “Some may say it is a lifestyle choice to live in a guarded environment, but it is not, it has become a real necessity due to the rising crime rate ...  As it is, we already pay taxes which go towards the salaries of the police, but we still have to engage security services to guard our neigbourhoods because we don’t feel secure or safe. Now, this is a third form of payment,” Tan said yesterday. He said that rather than paying a security firm, many would rather save the money if there is an option.

Lim pointed out that many people came to know they need to pay GST on their maintenance and security fees only about four months ago. “[Surely] There are many other items and services that are bound to be taxed which the people don’t know about and this will further burden them in view of the rising cost of living.”

Tan echoed Seputeh MP Teresa Kok’s (DAP) pledge earlier yesterday that the DAP will continue to pressure Putrajaya to rethink its decision to charge GST on maintenance fees. Kok was in Kuchai Lama with more than 15 management corporation (MC) heads representing over 30,000 apartment and condominium dwellers opposed to the idea that they would need to pay GST on their monthly management and maintenance fees.

Similar to gated and guarded communities, apartment and condominium dwellers will have to pay GST if their MC collects more than RM500,000 in maintenance fees. A notice to that effect was sent by the Ministry of Finance to the residents of Kuchai Brem Park. The letter, dated Oct 29,said only low-cost and low-medium cost apartments would be exempted from paying the GST.  In a letter dated Nov 17, pursuant to an appeal by the Brem Park residents, the Finance Ministry said the principle of GST does not differentiate whether the activity is for profit or otherwise, and activities conducted by non-profit organisations are subject to GST regulations.

The ministry noted that  there is no differentiation between an MC and a joint management body of a residential condominium and a commercial condo. — The Malaysian Insider

 

This article first appeared in The Edge Financial Daily, on November 25, 2014.

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