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Monday, August 24, 2015

GST adversely hits 8 out of 10 companies’ cash flow, survey shows

A retailer in Penang. A survey finds that the retail industry is adversely affected by GST. – The Malaysian Insider filepic, August 24, 2015.A retailer in Penang. A survey finds that the retail industry is adversely affected by GST. – The Malaysian Insider filepic, August 24, 2015.
The implementation of the goods and services tax (GST) has adversely impacted companies’ cash flow, a survey by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) showed.
Most Malaysian businesses, or over eight out of 10 (85%), have been forced to request for longer credit terms of above six months from their suppliers post-GST, as input tax refunds from the Customs Department are often delayed, said ACCCIM national council member Koong Lin Loong.
Koong also said that the imposition of GST has resulted in additional resources being allocated to business operations to ensure compliance.
“We urge the authorities to comply with the input tax refund period as stated under the law,” he said, adding that authorities should refund the tax within 14 days (electronic filing) and 28 days (manual filing).
Additionally, Koong said a whopping of 84% of respondents complained that they do not understand the net profit margin calculation formula provided in the Price Control and Anti-Profiteering Act 2011.
“They are also facing constraints such as how to determine margin for each product, the calculation of profit margin under exceptional cases such as promotional discount, adjustment on selling prices due to annual cost increases, and what constitutes operating cost.”
ACCCIM said they will hand in a memorandum containing recommendations for improvement on the implementation of the GST to the federal government this week.
Its survey, titled “Goods and Services Tax implementation in Malaysia”, was conducted from June 20-July 31 and polled 963 business operators across the country.
Its findings showed only 15% of the total 963 respondents remain on cash term with their suppliers and most of these are from the food and beverages industry. – The Edge Markets

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