GST will not cause sudden rise in medical costs, says Customs Dept

The Royal Malaysian Customs Department denied today that implementation of the Goods and Services Tax (GST) will cause a sudden rise in medical costs in the country.

GST Director Datuk Subromaniam Tholasy said on the contrary, implementation of the new tax regime will have a number of advantages for consumers or patients, particularly when the existing six per cent service tax is no longer imposed for room and meals for the duration of stay at hospitals.

He said at the same time, there were many types of medications that have been zero rated, alongside GST exclusion for the use of equipment such as X-Ray and Magnetic Resonance Imaging (MRI) machines.

"In reality, the increase is very slight. But, there is a small section of people who are kicking up a fuss, to create an impression that medical costs in Malaysia will see a sudden rise with the GST implementation on April 1, next year.

"That is not true. The increase in costs to hospitals is not big. We need to take into account savings from the abolishment of the present six per cent service tax," he added.

He told reporters this at a media conference after a GST Seminar and Registration, here today.

Meanwhile, Subromaniam said the GST is also exempted for health services provided by specialists at private hospitals and categorised as "contract of service", as the tax will be borne by the hospital concerned.

However, he added, it is different with specialists categorised in the "contract for service" and having their own companies offering services to hospitals, as they have to pay the GST.

Specialist doctors who need to register for the GST are those providing services to patients and categorised as outsourced service," he said.

In this regard, he said the specialists with their companies are urged to register for the GST quickly, as the number of those in this category who have done so is very small compared to the reality.

In another development, Subromaniam said the GST will not be imposed on those managing low and medium cost condominiums, but only on those that are high end.

The number of companies that have registered for the GST as of yesterday stood at 188,429 and of this number, 5,173 were from Melaka.