Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 12-10-2011 Last Replied Date:- 30-12-1899 – Goods and Services Tax in Malaysia may be implemented by the Malaysian Government somewhere in the third Quarter of 2011. 4% GST will replace the current sales and service tax currently levied at rates between 5% and 10%. Companies with revenue RM 500,000 and below would be exempted from imposing GST and about 70% of small and medium sized industries would also be exempted. The taxpayer must be registered with the Royal Malaysian Customs once the taxpayer achieves a certain prescribed annual sales turnover i.e. above RM 500,000. The registered taxpayer would also be required to submit periodic GST returns. Being a broad based tax, GST can
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ull; Only one out of the 11 working adults in the country pay income tax and revenue from this source is meagre. • Out of the total population of 28 million people in the country, only 1 million pay income tax. • 40% of the country s total revenue comes from the oil and gas industry. Oil and Gas is not a reliable source of revenue over the medium to long term because the commodities are depleting natural resources, and their prices are volatile. • The country has been stuck with Fiscal Deficits for more than a decade. The budget deficit is projected to have reached to a record high of more than 7% of the country s Gross Domestic Product [GDP] last year. The country cannot continue raising Debts to finance its deficits, otherw
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ecomes, it would be more costly for the Government to administer and for businesses to comply with it. Ø Pricing and embracing appropriate technology in areas such as GST collection at every stage of the supply chain. Ø To create awareness among the public so that they will understand GST better. GST is a grossly misunderstood concept and that s why certain quarters oppose the idea of having it and leads to its postponement. It is responsibility of the Government to educate all the stakeholders in the economy about the system to give them a bigger picture of the GST. A strong political will is needed to ensure GST becomes a reality in the Malaysian economy because any tax reform of this nature tends to meet with resistance a
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