GST a.k.a Good and Service Tax, an indirect tax is part of government intervention.
Malaysia is going to replace the regular Sales/Service Tax in 2015. Many people hate it (well who likes taxes anyway? except for government)
What's the difference between GST and Sales/Service Tax
GST charged on everything. Imagine a supply chain, with all the process of making the final product and sell them in market. For GST purpose, every single step in the supply chain are taxed to make calculation easier for the government. SST (Service/Sales Tax) do not apply this rule, instead SST only applied in the final product itself. Thus, GST provide more revenue for government than SST.
Imported products can not use SST, because they are not locally-made. However GST can be used to tax import products. Therefore, the government can earn more revenue using GST.
So how will this GST system affect us?
http://gst.customs.gov.my/en/cp/Pages/imp.aspx
http://www.straitstimes.com/breaking-news/se-asia/story/malaysia-introduce-gst-6-april-2015-20131025
According to the government, we will pay less tax by using the GST system compared to SST, this is because everything is taxed, therefore in the final product, there will be a reduction of tax. So overall, we as consumers, pay for everything in the supply chain, thus paying less when buying the final product.
Purpose of implying this system is to reduce the country's deficit.
GST sounds like a good thing, but...............please check the video I posted in the beginning of this post
http://www.youtube.com/watch?v=kisfAC7kBS8
The government use the regressive tax policy to tax Malaysian, which is very weird to be honest. And by implying this GST, this will further burden the worker class, while the rich remain untouched at all. The economist says that, GST is a good thing, but the government must change the tax policy first, using progressive tax with GST is a far better option the government has right now. Regressive tax will just encourage consumers to skip taxes, and the rich people do not even get bothered by tax.
Should government use GST? Yes or No?
Malaysia is going to replace the regular Sales/Service Tax in 2015. Many people hate it (well who likes taxes anyway? except for government)
What's the difference between GST and Sales/Service Tax
GST charged on everything. Imagine a supply chain, with all the process of making the final product and sell them in market. For GST purpose, every single step in the supply chain are taxed to make calculation easier for the government. SST (Service/Sales Tax) do not apply this rule, instead SST only applied in the final product itself. Thus, GST provide more revenue for government than SST.
Imported products can not use SST, because they are not locally-made. However GST can be used to tax import products. Therefore, the government can earn more revenue using GST.
So how will this GST system affect us?
http://gst.customs.gov.my/en/cp/Pages/imp.aspx
http://www.straitstimes.com/breaking-news/se-asia/story/malaysia-introduce-gst-6-april-2015-20131025
According to the government, we will pay less tax by using the GST system compared to SST, this is because everything is taxed, therefore in the final product, there will be a reduction of tax. So overall, we as consumers, pay for everything in the supply chain, thus paying less when buying the final product.
Purpose of implying this system is to reduce the country's deficit.
GST sounds like a good thing, but...............please check the video I posted in the beginning of this post
http://www.youtube.com/watch?v=kisfAC7kBS8
The government use the regressive tax policy to tax Malaysian, which is very weird to be honest. And by implying this GST, this will further burden the worker class, while the rich remain untouched at all. The economist says that, GST is a good thing, but the government must change the tax policy first, using progressive tax with GST is a far better option the government has right now. Regressive tax will just encourage consumers to skip taxes, and the rich people do not even get bothered by tax.
Should government use GST? Yes or No?