KOTA KINABALU – Malaysians awaited patiently on the day Goods and Services Tax (GST) will be implemented with the new rate imposition effective 1st April 2015.
Malaysia is one of the three countires in the Asean region which has not implemented GST besides Brunei and Myanmar. Today, there are more than 160 countires in the world have implemented GST.
In the current Malaysian tax system there are two indirect taxes, one is the 10 per cent Sales Tax (Sales Tax Act 1972) and the other is the 6 per cent Service Tax under the Service Tax Act 1975. When these two taxes combined it is referred to as the SST.
The GST rate is fixed at 6 per cent with the abolishment of sales tax and service tax. The complexity of the Malaysian’s GST has likely confuse the public and most of them believe that GST is a burden.
However with GST the consumer is taxed only when they spend. It is a consumption tax levied on goods and services at all level of business. It is aimed to streamline the country’s tax system to be more effective, efficient, transparent and business-friendly.
The government under the leadership of Prime Minister Datuk Seri Najib Tun Razak explained that the GST would spur the country’s economic growth and to attain developed nation status.
In theory, GST to consumers may represent a minimal effect. Suppliers, manufacturers, wholesalers and retailers are able to recover GST incurred on inputs. This reduces the cost of doing business, thus enabling fairer prices for consumers.
There are certain basic goods and services exempted to GST. These include basic foods, residential accommodation, education, health services, public transportation, and domestic consumption of water supply and electricity up to a certain limit. – By Fizah Yusof/SayangSabah