Malaysia has recorded to be at 23rd spot in World Bank’s ease of doing business ranking among 190 economies from 22nd position in 2015. The implementation of the GST partly contributed to the drop and had led to Malaysia reporting a weaker scoring in starting a business segment, with a ranking of 112, as companies with an annual revenue of more than RM500,000 have to be registered as a GST payer. Ten different indicators are taken into account for the scoring and ranking which includes getting credit, trading across borders and enforcing contracts, to name a few. Feedback from accountants, engineers and lawyers were also taken into consideration.

The World Bank Group Global Knowledge and Research Hub in Malaysia country manager, Faris H. HadadZervos said that Malaysia GST system needs more time to run smooth and reach its maturity as this has been the first year of introduction of GST. Faris highlighted that Malaysia continues to maintain its strong performance in several areas of doing business. It was one of the top 15 performers globally in dealing with construction permits. Besides that, Malaysia retains its spot as the third best economy in terms of protecting minority investors.

Credit was also given to Malaysia’s effort in implementing the strengthening of credit reporting by providing consumer credit scores and the introduction of an online system for filing and paying GST. He also added that Malaysia performed particularly well in the paying taxes indicator segment, which was expanded to include measures of post-filing processes relating to tax audits and tax refunds.

Source: The Sun Daily, 27 October 2016