A Goods and Services Tax (GST) will be implemented in Malaysia soon. Basically, this consumption tax is imposed on consumers’ goods and services. However, for a business owner they also need to think carefully as they need to apply it to their business. If they fail to do that, then they may suffer the loss of the credit for input taxes.
Apparently, this GST will affect not only accounting, finance, or tax personnel, but it will affect all levels of staff also, including those from sales, operations, and even human resource.
My Opinions on GST Malaysia 2011
What I’ve concerned with the new implementation of GST is it may lead to higher inflation at the later stage. And, the income disparity among Malaysians is still very large. In the other words, the percentage of Malaysian whose earning more than the threshold for paying income tax still very low. So, when income tax rates is decreased after the implementation of GST, then we can see that only the upper income group can benefit from the tax rate reduction.
Besides that, there will be high cost of administration and implementation of GST incurred by our government which cost almost RM 222 million to ensure the effective implementation of GST. This total cost will cover GST computerised system (RM139 million) and GST operational cost (RM83 million). After implemented successfully, our government will need to pay the GST yearly maintenance cost of RM 8.5 million. Thus, it is quite heavy spending on this new implemention.
If not mistaken, the GST system will be implemented in the mid of 2011. So, what do think about this new idea?