Global expertise with local knowledge
23 Jul 2018
The new government’s effort to abolish the GST, as commitment to its election manifesto, is laudable. However, the hurried change had displaced some benefits that could be derived from adequate public consultation as outlined in the 2014 Guideline on Public Consultation. Public Consultation is a national policy developed in partnership with the OECD Directorate.
Topics covered included (i) the basic principles of consumption tax and implications of the proposed system; (ii) advantages and disadvantages of the two frameworks; (iii) socioeconomic impacts from a change in tax regime; (iv) control and implementation issues in the previous GST regime; and more importantly (v) transitional issues and differences in the old (pre-GST) and new proposed SST system.
It is evident that the perception of increased prices and issues of late refunds are primary sources of discontent by some quarters with the GST framework. They were however borne from systemic factors, lapses in regulatory controls, inadequate planning and communication, and flaws in implementation design. The manner in which the SST law is being passed without adequate opportunity for consultation warrants deeper consideration particularly from the wider perspective of the need to maintain national competitiveness as governments around the region and in developed economies are increasing tax revenues to fuel development and to distribute wealth in a more equitable manner.
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