Diantara Keratan Akhbar Budget 2014: More petrol price adjustments seen next year ECONOMISTS and analysts expect more adjustments in petrol prices next year, in line with the Government’s subsidy rationalisation plan, which aims to lighten the burden on the country’s fiscal deficit. “The hint is that the petrol subsidy is going to be the focus in terms of subsidy rationalisation. I expect more frequent price adjustments in the future,” saidMalaysian Rating Corp Bhd chief economist Nor Zahidi Alias. He believes that adjustments will be made after the first quarter of 2014, when concerns over the budget battle in the US economy and the lower targeted gross domestic product growth of below 8% in China are more settled. Budget 2014: GST, sugar subsidy removal foremost on Malaysians minds PETALING JAYA: The abolition of sugar subsidies and the impending implementation of goods and services tax (GST) in April 2015 are the main concerns of the Malaysian public following the Budget 2014 announcement by Prime Minster Datuk Seri Najib Tun Razak on Friday. The current price of sugar is RM2.50 per kg, and will rise to RM2.84 on Saturday. With many saying there were already struggling with the high cost of living, further tightening of their belts were needed with the subsidy cut. Budget 2014: Higher tax rates may not stop house prices from going up PETALING JAYA: The increase in Real Property Gains Tax (RPGT) will dampen speculation but it is unlikely to stop house prices from escalating and may even lead to a rise, say developers and consultants. Real Estate and Housing Deve¬lopers Association (Rehda) president Datuk Seri Michael K.C. Yam said the drastic increase to 15%-30% from 10%-15% previously would discourage any would-be speculator. “Having said that, I have no strong evidence that speculation was one of the main reasons that pushed up property prices. There were some hot spots but it was definitely not on a nationwide basis,” he told The Star. Property prices in the sub-sale market, added Yam, could increase if homeowners decided to defer selling to avoid the new tax rates. The sub-sale market, he said, comprised 70% of residential transactions and a decrease in market supply would be inevitable if homeowners delayed selling. “This means buyers will move to the new properties market and further increase the demand-supply imbalance there. So, a possible side effect is that it could even move prices higher,” he said. The flat rate of 30% RPGT for six years on foreign-owned properties, said Yam, would also hurt developers during their promotions abroad. CH Williams Talhar & Wong Sdn Bhd managing director Foo Gee Jen said the doubling of RPGT to 30% would lessen or stop speculation but that in the long-term, this would only make the market more manageable instead of stopping prices from going up. However, he said limiting foreigners to buying properties worth RM1mil and above should only be applied to major cities like Kuala Lumpur, Johor and Penang. Khong & Jaafar Sdn Bhd managing director Elvin Fernandez said increasing the RPGT at this stage would also arrest undue price hikes, which was usual before the implementation of Goods and Services Tax scheduled for April 2015. Deloitte Malaysia RPGT leader Tham Lih Jiun said property price escalation was due to other factors besides speculation, including rises in construction cost and building materials as well as land scarcity. However, Johor Rehda branch chairman Koh Moo Hing said the increase in the ceiling price for foreigners was expected to have a “negative impact” on the state’s property market, calling it “not good news” for Iskandar Malaysia. Restaurateur unsure of benefits of GST SIBU: A local restaurateur said it was good that the 6% Goods and Services Tax (GST) would be implemented in April 2015 rather than sooner. Peter Tang of The Cafe Indi at Lorong Lai Chee here also said the rate was much lower than the current one, which is 16%. “It is good that consumers can save 10% when the GST is fully enforced in April 2015, but with 17 months till then, customers might not be able to save because the raw materials for food might also be subjected to the current rate of taxes,” he toldThe Star. Still Tang said it was rather too early to tell whether his restaurant would fare better after the GST had been enforced. “Our business has dropped in the last four to six months even though we have reduced our prices. It was a double blow for us following the 20 sen hike in the petrol prices, and the implementation of the minimum wage. “Our regular customers dined here once to two times a week before that. “Now they only come once in two weeks,” he said. On the extra tax reduction following the implementation of the minimum wage, Tang said that although it was good, it was not helping his company in reducing overhead cost because he had increased the salaries of their workers to comply with the minimum wage requirement. He said businesses like his was having a bad time as the town lacked tourists and expatriates compared to Kuching, Bintulu and Miri. Feeling the GST pinch KUCHING: The state Malaysian Trades Union Congress (MTUC) has expressed deep concern over the proposed Goods and Services Tax (GST), which is scheduled to begin April 1, 2015. “A poor family earning RM2,000 is not paying (income) tax now, but soon, they’ll be paying GST. “In Malaysia today, only about 15% of registered companies are paying corporate taxes — go after them,” Sarawak MTUC’s secretary Andrew Lo told The Star in a phone interview immediately after the unveiling of Budget 2014 by Prime Minister Datuk Seri Najib Tun Razak yesterday. He said even at the 6% proposed rate, the poor and working classes would feel the pinch. “Also, MTUC is concerned about enforcement once GST comes into effect. Right now, Customs (Department) cannot prevent beer smuggling. How sure can we be sure smuggling won’t increase after GST?” said Lo, who is also chief executive of Sarawak Bank Employees Union. Lo also claimed the introduction of GST in advanced countries had not been smooth sailing, highlighting that it could be one of the causes of Japan’s decades-long economic woes. “Japan implemented GST in 1995. The country has either experienced recession or slow growth since.” During the tabling in Parliament, Najib spent almost 20 minutes detailing the GST framework, confirming the Sales Tax and Services Tax would be replaced. He said GST would come in 17 months’ time, and also announced measures like a special one-off RM300 to recipients of BR1M at the time of the new tax introduction. MTUC is among several high profile non-governmental bodies opposed to GST. On the Opposition front, Pakatan Rakyat had said in its alternative Budget that GST should not be implemented until real wages had improved. It described implementing GST now as a “short-cut” and “easy way out” to increase Government revenue.
Posted on: Sun, 27 Oct 2013 04:54:37 +0000
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