Malaysia is to introduce a new Goods and Services Tax (GST) Act to replace a draft Act originally put forward in 2009. The new Act will contain harsh penalties for taxpayers who fail to comply with its provisions. The GST rates and structure are not specified in the legislation and they will therefore need to be reviewed before the planned date of introduction of the GST which is 1 April 2015.
The penalty provisions in the legislation include a fine of between 10 and 20 times the unpaid GST and in the case of a further offence a fine of between 20 and 40 times the unpaid GST. The Act provides in some cases for a prison term of up to five years or even as much as seven years for some cases where there is a repeat offence.
