KUALA LUMPUR, March 18 ― A tax expert and a National Council of Professors (MPN) member urged the government to avoid applying the Goods and Services Tax (GST) to research grants.
Chartered Tax Institute of Malaysia former president Thanneermalai SP SM Somasundaram said large research institutions could apply to the Finance Ministry for a relief order, if Putrajaya did not want to zero-rate research grants under the consumption tax.
“That's not too difficult. It's a matter of putting forward the case of being beneficial to the country. If there is a benefit, the Finance Ministry will consider it favourably,” he said when contacted.
Malay Mail Online reported last Friday that most research grants ― whether they were from the government, universities, private companies or statutory bodies ― were subject to the GST.
The Ministry of Higher Education said the imposition of the GST on its research grants only came into effect last August after the Finance Ministry made a decision last year, though the Customs Department said the six per cent tax was imposed on research grants back in April 2015 when the government rolled it out.
Professor Datuk Teo Kok Seong, head of the history, heritage and socio-culture cluster at MPN, said he only heard of the imposition of GST on research grants after Malay Mail Online’s report was published.
“If earlier notification was not given, then this is very unfair because first of all, the research grant is already very, very limited these days,” Teo told Malay Mail Online.
“Many years ago when the government had money, they'll give out [research grants] generously. But now, whatever you ask for, you'll never get it 100 per cent. If you can get 30, 35 per cent, very lucky already. When you only get 30, 35 per cent, that means the research has to be reorganised,” added the professor of Malay linguistics at Universiti Kebangsaan Malaysia’s Institute of Ethnic Studies.
He said researchers would not be able to conduct comprehensive studies.
“So the scope of research has to be small. Then now you have to allocate some 6 per cent for GST,” said Teo.
A professor from a private university previously told Malay Mail Online that research grants from the Ministry of Higher Education or from the Ministry of Science, Technology and Innovation were inconsistent.