Whether or not the Goods and Services Tax (GST) will be imposed on petroleum products will very much depend on how much savings can be derived from the subsidy rationalisation programme.

Deputy Finance Minister Ahmad Maslan said to date, this matter was yet to be resolved.

“We are carrying out a study on the subsidy rationalisation headed by the Minister in the Prime Minister’s Department Abdul Wahid Omar and when it is completed we will be able to see how much we have saved.

“If the savings are enormous, the government may even decide not to impose GST on RON 95 and other petroleum products but if it (savings) is not (huge), then the six percent GST will be imposed but there is no decision yet,” he told reporters on the sidelines of the ‘International Seminar on GST 2014' in Kuala Lumpur today.

The one-day international seminar, organised by the Finance Ministry, gathered experts from around the world to speak on their respective countries’ experience in implementing the value-added tax.

On the impact of the GST on the real estate and housing sector, Ahmad said prices would only increase between 1.5 and 2.0 percent and not between 3.0 percent and 4.0 percent as claimed by some real estate and housing associations.

“When GST is implemented on April 1, 2015, the one-off increase of 1.5 percent will be based on an already stable situation. Don’t look at current prices and than add 1.5 percent.

“Besides, in efforts to reduce house prices, the government may announce new measures to control escalating prices in the coming 2015 Budget to be tabled on Oct 10,” he added.

- Bernama