KUCHING: Logging and timber manufacturing businesses in the state are generally still not ready for the implementation of the proposed goods and services tax (GST) on Jan 1, 2007. 

This is because most of their employees have little knowledge on GST and their accounting systems are not ready for it.

These are some of the findings of the Sarawak Timber Association survey on 565 members to gauge their awareness and readiness for GST. 

About 90% of the respondents to the questionnaire are involved in forestry activities, like logging and downstream timber manufacturing. 

“A total 52% of the respondents have the misconception that GST would not help in the exporting of Malaysian goods,” said association chief executive officer Dr Lee Hua Seng.

He said 54% felt the GST would increase the cost of doing business, and hence the need to increase prices.

“Based on the survey, it would appear that the members’ awareness of GST issues is superficial.”

Dr Lee said GST, also known as value-added tax in some countries, was a tax on the final consumption of goods and services.

Each person or company in the production and distribution chain of goods and services has to charge and collect GST from clients, and to pay this output tax to the Government.

At the same time, a person or company is allowed to make a refund claim from the Government for any GST (known as input tax credit) paid for the purchase of goods and services.

“The end consumer bears the burden for the total GST paid to the Government for that product or service,” added Dr Lee in a statement.

To address the weaknesses identified in the survey, the association would conduct seminars on GST in major towns in Sarawak next month.