GST implementation after GE. Will such a headline in the local newspaper affect the results of General Election (GE) in Malaysia? In Malaysia, the date of GE is the prerogative of the ruling party, specifically the Prime Minister. There is talk that the 13th General Election is 'round the corner'.
The Prime Minsiter Datuk Najib has been reported to announce in a dialogue session with Forbes Media editor-in-chief Steve Forbes, .that 'the government would introduce the goods and services tax “when the time is right”, and “I guess when the time is right, in the near future, probably after the next general election, we will introduce the GST."
The ruling government has repeatedly postponed the introduction of GST, partly due to strong opposition from the opposition party. So the topic of GST will be a hot topic in every election 'ceramah' if the topic is not handled properly by the ruling party.
Repeated postponement of GST is not good for business planning. Business owners need time to plan for the implementation, if at all it is to be introduced.
It has been reported that only 1.2 million Malaysians pay income tax, out of a workforce of 12 million. With the Goods and Services Tax, more Malaysians will be contributing to the nation's development.
Source : The Star, Sep 19, 2011
May 16, 2011
Benefits of GST - fact or myth?
One of the more obvious fact of implementing the Goods and Services Tax (GST) is that the Government will reduce corporate and individual tax to make it sustainable for business, and also become more attractive for foreigners to invest in the country.
The Malaysian Government recently (via its Deputy Finance Minister Datuk Donald Lim Siang Chai) announced that the Budget 2012 on October 7, 2011 is expcted to address the issue of reducing income tax rates. The tax reduction will take place once the Government implements the long-awaited Goods and Services Tax (GST), he says.
What other benefits can we expect from the introduction of GST?
1. Without GST, the Malaysian government experiences a deficit of 5% of GDP. With GST, the Government hopes to reduce the deficit to 2.8% - 3% by 2015.
2. It is time we follow the other 225 countries in the world that have already implemented GST. Malaysia is one of the last remaining countries in South East Asia that does not have GST. [my one sen : So it is time for Malaysia to do the same, ??]
3. GST system will address the imbalance of sources of government revenue. GST is seen to be a fair system , as all sectors of the population will contribute to the country's development. Under the current tax structure (combination of corporate tax, sales tax, excise duties, and other direct taxes), only a small section of Malaysians and companies are bearing the taxes.
4. Reducing corporate tax to offset GST should encourage more foreigners to invest in Malaysia, and drive Malaysia's economy [my one sen : with 225 other countries trying to vie for foreign investment, and doing the same, won't we be in the same boat pre and post GST?]
5. Even though GST is imposed at every level of the supply chain, the tax element does not (and should not) become part of the product cost, because the GST paid on the business inputs is claimable.
With the introduction of GST, the cost of just about everything (except basic necessities and controlled items) may increase (despite anti-profiteering acts). The GST may be intended to make it cheaper for business to spend because it eliminates sales tax and custom duties. However, it does not prevent the businesses from increasing prices due to ignorance and abuse of the system, so stricter enforcement is required to ensure that traders do not hike prices, and circumvent the GST by not issuing receipts and invoices.
GST may have a financial impact on the poor, and not all the 225-odd countries that have implemented GST have high-income economies, but the GST tax system works in those countries
Reference
The Malaysian Government recently (via its Deputy Finance Minister Datuk Donald Lim Siang Chai) announced that the Budget 2012 on October 7, 2011 is expcted to address the issue of reducing income tax rates. The tax reduction will take place once the Government implements the long-awaited Goods and Services Tax (GST), he says.
What other benefits can we expect from the introduction of GST?
1. Without GST, the Malaysian government experiences a deficit of 5% of GDP. With GST, the Government hopes to reduce the deficit to 2.8% - 3% by 2015.
2. It is time we follow the other 225 countries in the world that have already implemented GST. Malaysia is one of the last remaining countries in South East Asia that does not have GST. [my one sen : So it is time for Malaysia to do the same, ??]
3. GST system will address the imbalance of sources of government revenue. GST is seen to be a fair system , as all sectors of the population will contribute to the country's development. Under the current tax structure (combination of corporate tax, sales tax, excise duties, and other direct taxes), only a small section of Malaysians and companies are bearing the taxes.
4. Reducing corporate tax to offset GST should encourage more foreigners to invest in Malaysia, and drive Malaysia's economy [my one sen : with 225 other countries trying to vie for foreign investment, and doing the same, won't we be in the same boat pre and post GST?]
5. Even though GST is imposed at every level of the supply chain, the tax element does not (and should not) become part of the product cost, because the GST paid on the business inputs is claimable.
With the introduction of GST, the cost of just about everything (except basic necessities and controlled items) may increase (despite anti-profiteering acts). The GST may be intended to make it cheaper for business to spend because it eliminates sales tax and custom duties. However, it does not prevent the businesses from increasing prices due to ignorance and abuse of the system, so stricter enforcement is required to ensure that traders do not hike prices, and circumvent the GST by not issuing receipts and invoices.
GST may have a financial impact on the poor, and not all the 225-odd countries that have implemented GST have high-income economies, but the GST tax system works in those countries
Reference
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