Residents staying in landed properties with gated and guarded facilities will be subjected to pay the 6% of Goods and Services Tax (GST) for their maintenance fees, Cheras MP Tan Kok Wai (pic) revealed today.
The DAP politician said although the rule only applies to security companies that earned more than RM500,000, it was still unfair as residents mainly chose to live in gated communities for safety reasons.
He urged Putrajaya not to make the people pay additional tax for a services as basic as security, which was close to every person's heart.
"Some may say it is a lifestyle choice to live in a guarded environment, but it is not, it has become a real necessity due to the rising crime rate in the country.
"As it is, we already pay taxes which go towards salaries of the police, but we still have to engage security services to guard our neigbourhood because we don't feel secure or safe. Now, this is a third form of payment by paying GST," Tan added.
He said he was paying RM180 a month for his gated living in Cheras, adding that rather than paying to the security firm in that price range, many would rather save the money if there was an option.
Lim pointed out that residents only came to know that they needed to pay GST for their maintenance and security fees about four months ago.
"(Surely) There are many other items and services that are bound to be taxed which the people didn't know about and this will further burden them in view of the rising cost of living," he said.
Tan echoed Seputeh MP Teresa Kok's pledge earlier today that DAP will continue to pressure Putrajaya to rethink its decision to charge GST on maintenance fees.
Kok was in Kuchai Lama with more than 15 management corporation (MC) heads representing over 30,000 apartment and condominium dwellers opposing to the idea that they would need to pay GST for their monthly management and maintenance fees next year.
Similar to the gated and guarded community, apartment and condominium dwellers would be imposed on MCs collecting more than RM500,000 in maintenance fees.
This came following a notice from the Finance Ministry to the Kuchai Brem Park residents informing them that GST would be imposed on MCs collecting more than RM500,000 in maintenance fees.
The letter, dated October 29, also mentioned that GST would only be exempt for low-cost and low-medium cost apartments.
In a following letter dated November 17, pursuant to the appeal by the Brem Park residents, the Finance Ministry wrote that the principle of GST did not differentiate whether the activity was for profit or otherwise, asserting that even activities conducted by non-profit organisations were subject to GST regulations.
The ministry noted that under GST, there was no differentiation between an MC and JMB of a residential condominium and a commercial condominium.
When contacted, National House Buyers Association honorary secretary general Chang Kim Loong declined comment until he was clearer on the actual situation regarding the imposition of GST on maintenance fees. – November 23, 2014.
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