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> Goods and Services Tax (GST), what do you need to know (Serious Talk)

hazremi
post Mar 4 2011, 07:10 PM


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QUOTE
GST – Malaysia Goods and Services Tax in Year 2011
Published: December 6th, 2009

On 24 November 2009, Malaysia Prime Minister, Dato’ Sri Mohd Najib Tun Abdul Razak had announced that a bill relating to the proposed introduction of GST – Goods and Services Tax will be tabled at the end of the current Parliament Sitting. For your info, Goods and Services Tax will be implemented starting 3rd quarter of year 2011. Therefore, all Malaysian have to prepare yourself to pay 4% extra for everything you buy or service.

What is GST?
GST, a multi-stage consumption tax, is based on consumption rather than earnings and can be charged on virtually all supplies of goods and services. The proposed implementation of GST will replace the current Malaysian service tax and sales tax.

Broadly, GST works by offsetting GST paid on purchases (input tax) against GST due on sales or supplies made (output tax). This is referred to as the credit offset mechanism. The multi tier stages of tax helps to ensure that GST paid by businesses for purchases does not end up being a permanent cost. However, the consumer ultimately bears the burden of the tax.

How GST affects businesses?
Where GST is implemented, the taxpayer must be registered with the Royal Malaysian Customs once the taxpayer achieves a certain prescribed annual sales turnover. The registered taxpayer would also be required to submit periodic GST returns.� If the output tax is greater than the input tax, the taxpayer will have to pay the excess.� Conversely, if the input tax is greater than the output tax, the taxpayer could seek a refund from the Royal Malaysian Customs.

In addition to the compliance requirements above, taxpayers would be required to undertake additional administrative work which includes, amongst others, keeping track and recording all input taxes paid, undertaking reconciliations and filing of GST returns.

How does GST work?
Conceptually, GST is imposed on the value added to goods or services by each separate processor in the production and distribution chain. This can be seen in the simple illustration below.

user posted image

What do YOU need to do?
At this point in time, the issues in relation to GST that businesses should consider include:

��The additional record keeping requirements that GST will impose and your IT systems ability to handle this.

��The likely GST treatment for your products / services and the impact on pricing strategies.

��The impact of GST on long term contracts.

��The GST cost of outsourcing versus internal supply.

��Timing of purchases pre and post the implementation of GST.

��Impact of GST on benefits-in-kind to staff and provision of samples and gifts.

��The need to educate your staff and customers on GST issues and compliance.

Conclusion:

What do you think about GST – Goods and Services Tax? Should it be implemented in our country? Are Malaysian ready to pay for the extra tax? What say you?
http://www.money4invest.com/gst-malaysia-g...x-in-year-2011/

QUOTE
Will it hurt the poor & middle class?

To a certain extent, it will somehow affect pockets of middle and lower income group Malaysians.The arguments:

1.Recent price hike in petrol, prices of commodities have increased drastically. And now another one called GST?
2.Income tax brackets for high earners aren’t as ‘expensive’ as middle-to-low income groups. Check Malaysia’s Income Tax Rates 2009 »
3.The Malaysian government has saved approximately RM2 billion (RM2,000,000,000) by lowering fuel subsidies – What’s the take on GST now for lower income groups?
4.GST is tax on SPENDING. Basically, everything from parking fees to purchasing mattress. Even with GST-exempted items, this would still hit lower income groups in Malaysia.
5.Private sectors aren’t paying much to Malaysians – Other more developed countries such as Singapore could take this hit because wages & salaries are much higher.
6.Other countries such as Britain, India, Hong Kong, Japan and Singapore has GST – Doesn’t mean GST has to be implemented in Malaysia. Their economic status and way of gaining revenue varies from Malaysia. (GST is also called VAT – Value Added Tax in other countries)
7.Inflation may happen. Prime Minister Mr. Najib has guaranteed no inflation – But with the introduction of GST, the chain of ‘passing the cost’ will end up usually at the hands of consumers.
8.Corruption isn’t a rare thing in Malaysia – So businesses has already included ‘corruption prices’ in goods & services. How does that not reflect additional costs to consumers?
9.Out of inflation pressures, higher prices for goods & services are sought.

Prime Minister Mr. Najib has promised Malaysians that they will be tabling a public discussion on GST (called the GST Bill) on December. There are also several upsides that could be seen – But until Mr. Najib tables the meeting on GST Bill, we shouldn’t be skeptical of anything yet.

Other side of the GST story
GST has been said to promise a few things:

1.Implementation will not be abrupt. It will be a slow & steady tax preparation so that individuals and small businesses will not be adversely affected.
2.It will replace the 10+5% services and goods tax. This means taxes are lower now – Consumers need not pay more for one area, but it’s divided into many other source of ‘tax’ payments.
3.GST rates are promised at 4%, out of the normal 10% or 5% charged in restaurants.
4.Implementation will not occur until middle to late 2011 or 2012. Planning time is essential to not put ‘inflation pressure’ on small businesses.
5.Government’s coffers will increase. This will enable further development and budget control to the country, other than relying just on petroleum or income tax revenues.
6.Tax when consumed, not when earned is much better. It allows better control. Spending influences will be “Careful” and “More controlled” when purchasing on higher prices are made rather than “taxable incomes” generated from work.
It’s a broad-based tax system. Some items may be slightly more expensive & cheaper. It’s not a overall standardized taxation method.

http://knol.google.com/k/gst-implementatio...a-the-argument#


my question: i am charged 6% tax in my astro bill, does this mean when GST is implemented, i will be only charged 4% in my astro bill? hmm.gif

This post has been edited by hazremi: Mar 4 2011, 07:19 PM
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joe_mamak
post Mar 4 2011, 07:11 PM


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What we need to know is BN is sucking us dry.
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hazremi
post Mar 4 2011, 07:14 PM


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QUOTE(joe_mamak @ Mar 4 2011, 07:11 PM)
What we need to know is BN is sucking us dry.
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i'd appreciate if you reply maturely.TQ
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joe_mamak
post Mar 4 2011, 07:15 PM


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QUOTE(hazremi @ Mar 4 2011, 07:14 PM)
i'd appreciate if you reply maturely.TQ
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I did. You are welcome.
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Fall guy
post Mar 4 2011, 07:27 PM


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GST huh?
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Faidzal
post Mar 4 2011, 07:32 PM


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QUOTE(hazremi @ Mar 4 2011, 07:10 PM)
http://www.money4invest.com/gst-malaysia-g...x-in-year-2011/
http://knol.google.com/k/gst-implementatio...a-the-argument#
my question: i am charged 6% tax in my astro bill, does this mean when GST is implemented, i will be only charged 4% in my astro bill? hmm.gif
*
GST rate has yet to be finalised? Meaning it might not be 4%?

But right now sales tax is 6% (monthly bills, KFC/McD etc).

I bet govt. willsimply convert sales tax into GST meaning minimum GST is 6%....
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hazremi
post Mar 4 2011, 07:56 PM


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QUOTE(Faidzal @ Mar 4 2011, 07:32 PM)
GST rate has yet to be finalised? Meaning it might not be 4%?

But right now sales tax is 6% (monthly bills, KFC/McD etc).

I bet govt. willsimply convert sales tax into GST meaning minimum GST is 6%....
*
this is what I wonder rite now..not sure also
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LuckyDucky
post Mar 4 2011, 08:02 PM


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ok first is credit card impose rm50 tax
then mobile phone postpaid line 6% tax
then now gst
really #^#/%#.#$%*^%&*$$#&

im going to migrate then, no point live here anymore
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teehk_tee
post Mar 4 2011, 08:04 PM


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going by the logic of it yes. 6% now --> 4% GST.

but u know lah the govt, 6% now, like to become 6% later.

they prolly gonna just move all the sales and govt tax to GST, and widen up the tax base.
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Balaclava
post Mar 4 2011, 08:05 PM


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It means while they write there 4% it is actually 6% cause they just want to f*** around with you.
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old_and_slow
post Mar 4 2011, 08:13 PM


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we are getting taxed more and more while having same quality of service from government.
poland also has high tax, but their gov is serving their rakyat well.
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junky_man
post Mar 4 2011, 08:16 PM


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GST implies the burden of tax is at the end consumer.

So, if you are selling 2nd hand at garage sale section, make sure you include the govt tax as well. wink.gif
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cofin
post Mar 4 2011, 08:18 PM


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My ex-job send me for a course on GST ......i cant remember what they talk already but i only know it benefit business
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soundsyst64
post Mar 4 2011, 08:27 PM


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People complaint of everything, but you still pay for it sleep.gif
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Balaclava
post Mar 4 2011, 08:33 PM


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QUOTE(cofin @ Mar 4 2011, 12:18 PM)
My ex-job send me for a course on GST ......i cant remember what they talk already but i only know it benefit business
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It benefits anyone who implement it.
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hazremi
post Mar 4 2011, 08:34 PM


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QUOTE(soundsyst64 @ Mar 4 2011, 08:27 PM)
People complaint of everything, but you still pay for it sleep.gif
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bcoz we are rich rclxms.gif
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soundsyst64
post Mar 4 2011, 08:36 PM


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QUOTE(hazremi @ Mar 4 2011, 08:34 PM)
bcoz we are rich rclxms.gif
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Ohhhh yes! Filthy rich! laugh.gif
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tiggert
post Mar 4 2011, 08:41 PM


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Technically, the 10% sales tax + 5% services tax should be replaced with 4% GST tax.

I also can't remember correctly, so please correct me if I am wrong.

But the thing is, 10% sales tax is taxed at one point in time. So like if the manufacturer collect the 10%, other people cannot collect.

However, for GST, it is taxed at every level i.e. manufacturer when buying goods, then shop when buying from manufacturer, then buyer when buying from shop.

So if you add up, if at 4%, it should work out to be about 10% or more, of the total sales tax.

The reason why the government implement this is because of loss in revenue. So imagine, if I am manufacturer of shampoo, make one shampoo RM4.50 and make RM0.50 profit margin, and then collect sales tax on it for 10%, means shop pay me RM5.50 (RM0.50 to government). But then the shop charge the buyer RM10, and without tax. So, there is a loss of income from the manufacturer to shop.

So example again, with GST, manufacturer buy stuff at RM4.50, pay 4% GST, so RM0.18. So if manufacturer make RM0.50, he will charge shop RM5.39 (RM4.50 + RM0.18 + RM0.50)x 1.04. So then shop charge you... RM10.30 (RM5.39 + RM4.50 (profit margin)) x 1.04.

So it totals up to be a bit more than 10%.

So, the problem is, if you got a long chain of middle men, then you see there is a lot of money to be collected.

And another thing is, 4% GST is easy to be implemented. So if government no money, just increase GST to 5%, 6% etc... then you see how much more money they get.


---

But for services, you get 10% + 5%. So, technically, services wise we, consumers should benefit. But then with all the cost increases, don't really know at the end.

So eg., restaurant = 10% + 5%.

After GST, restaurant = 4%... but then the cost of everything else +4%.

This post has been edited by tiggert: Mar 4 2011, 08:43 PM
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hazremi
post Mar 4 2011, 08:49 PM


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QUOTE(tiggert @ Mar 4 2011, 08:41 PM)


So eg., restaurant = 10% + 5%.

After GST, restaurant = 4%... but then the cost of everything else +4%.
*
does this mean, we'll be taxed directly 4% and indirectly 4% also..all together is 8%?
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teehk_tee
post Mar 4 2011, 08:55 PM


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QUOTE(hazremi @ Mar 4 2011, 08:49 PM)
does this mean, we'll be taxed directly 4% and indirectly 4% also..all together is 8%?
*
no, as end consumer, u get 4%, but GST's mechanism is taxing the entire chain from manufacturing to end-consumer.
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Polaris
post Mar 4 2011, 09:11 PM


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Let's see, which pictar to use...

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This post has been edited by Polaris: Mar 4 2011, 09:13 PM
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xavi5567
post Mar 4 2011, 09:26 PM


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it jus mean tat the more hand tat touch the product b4 the consumer buy it the more it get taxed.. so at the end of the day u gonna get taxed more than 15% . 4% at every transaction chain, so be a smart user reduce the middle man once tis stupid blood sucking mechanism is kick in.. the hard part for normal people.. it is hard to cut the middle man..so habis habis.. rakyat susah!!! kesian...
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sootienann
post Mar 4 2011, 09:32 PM


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this way of taxing is fairer , because it taxes spending instead of income.

so, salaried workers will pay less income tax, and they will face less burden overall.

those who will be badly affected are business owners who currently have many ways to escape from
paying income tax by charging lots of things as business expenses.

This post has been edited by sootienann: Mar 4 2011, 09:33 PM
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hazremi
post Mar 4 2011, 09:41 PM


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QUOTE(sootienann @ Mar 4 2011, 09:32 PM)
this way of taxing is fairer , because it taxes spending instead of income.

so, salaried workers will pay less income tax, and they will face less burden overall.

those who will be badly affected are business owners who currently have many ways to escape from
paying income tax by charging lots of things as business expenses.
*
salaried workers will pay less income tax - like this part
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xavi5567
post Mar 4 2011, 09:44 PM


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QUOTE(sootienann @ Mar 4 2011, 09:32 PM)
this way of taxing is fairer , because it taxes spending instead of income.

so, salaried workers will pay less income tax, and they will face less burden overall.

those who will be badly affected are business owners who currently have many ways to escape from
paying income tax by charging lots of things as business expenses.
*
biar betul.. how u make sense into salaried worker will pay less income tax? hmm.gif u get taxed for every RM u made..
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tiggert
post Mar 4 2011, 09:48 PM


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QUOTE(sootienann @ Mar 4 2011, 09:32 PM)
this way of taxing is fairer , because it taxes spending instead of income.

so, salaried workers will pay less income tax, and they will face less burden overall.

those who will be badly affected are business owners who currently have many ways to escape from
paying income tax by charging lots of things as business expenses.
*
lol. Don't be silly.

When SG first implemented the GST, they reduce the income tax for their rakyat. I cannot remember how much. But then when we implement? You think our gahmen will reduce it anot? The first proposal they did not even talk about reducing it.


Now it is the same. When we do not spend, we won't get taxed.


If the government were to reduce our income tax bracket, then maybe only then, the GST seems fairer.


I do agree that the most impacted are business owners. But then, they will also later have an excuse to raise up their prices... saying that it is for GST.
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rcracer
post Mar 4 2011, 11:56 PM


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Gov can reduce subsidies, implement GST but question is where is all the money going to? hardly can see anything, everything spent on 1malaysia BS, here give few million, there grant few million, in the end everyone make money but whole place still like crap.

Come general election is time for change already, doesn't matter whether the other can do the job or not, just totally fed up already
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sootienann
post Mar 5 2011, 01:50 AM


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QUOTE(xavi5567 @ Mar 4 2011, 09:44 PM)
biar betul.. how u make sense into salaried worker will pay less income tax? hmm.gif u get taxed for every RM u made..
*
first off, GST is supposed to shift from income-based tax, to consumption-based tax.
if u do not spend, u do not get taxed.
now that we have gotten this straight, lets proceed.


QUOTE(tiggert @ Mar 4 2011, 09:48 PM)
lol. Don't be silly.

When SG first implemented the GST, they reduce the income tax for their rakyat. I cannot remember how much. But then when we implement? You think our gahmen will reduce it anot? The first proposal they did not even talk about reducing it.
Now it is the same. When we do not spend, we won't get taxed.
If the government were to reduce our income tax bracket, then maybe only then, the GST seems fairer.
I do agree that the most impacted are business owners. But then, they will also later have an excuse to raise up their prices... saying that it is for GST.
*
in principle , government must cut income taxes when implementing GST, to show the impression of fairness.
otherwise there will be a lot of opposition.

GST will certainly cause inflation, no two ways about it.
this is because a product or service at every stage of the value-adding chain will be taxed.
it is not possible for businesses to absorb this costs, so they must pass it on to the consumer.
do not blame businesses. 100% of this mony is going to the government.

ok, so who will be affected?
the low income citizens will be affected the most.
currently if your salary is below a certain amount (i think rm 2000 per month) u wont kena taxed.
but after GST comes in , millions of low wage earners will be taxed whenver they buy something.
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sootienann
post Mar 5 2011, 01:52 AM


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QUOTE(rcracer @ Mar 4 2011, 11:56 PM)
Gov can reduce subsidies, implement GST but question is where is all the money going to? hardly can see anything, everything spent on 1malaysia BS, here give few million, there grant few million, in the end everyone make money but whole place still like crap.

Come general election is time for change already, doesn't matter whether the other can do the job or not, just totally fed up already
*
petronas has already started reducing dividends payment go government,
because they need to reinvest more on capex.
so gov is facing budget deficit.


This post has been edited by sootienann: Mar 5 2011, 01:53 AM
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joe_mamak
post Mar 5 2011, 01:54 AM


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QUOTE(rcracer @ Mar 4 2011, 11:56 PM)
Gov can reduce subsidies, implement GST but question is where is all the money going to? hardly can see anything, everything spent on 1malaysia BS, here give few million, there grant few million, in the end everyone make money but whole place still like crap.

Come general election is time for change already, doesn't matter whether the other can do the job or not, just totally fed up already
*
Military spending is up, I think. whistling.gif
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hazremi
post Mar 5 2011, 08:39 AM


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so my astro bill will be only 4%?
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+3kk!
post Mar 5 2011, 09:00 AM


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the malaysians arr

few years ago the government removed mobile eletronics tax why no one rejoice?

then they also reduced clothing and apparel tax why no one rejoice?

why no one ask? eh why ar remove/reduce tax d still soo expensive? suddenly all keep quiet hor?

why no one seem to notice that despite teh removal of a few taxes over the years we dont seem to see a drop in price?

econs fail
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Faidzal
post Mar 5 2011, 01:33 PM


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QUOTE(hazremi @ Mar 5 2011, 08:39 AM)
so my astro bill will be only 4%?
*
NO, because govt. has yet to set the GST rate.

4% is just an EXAMPLE, not the actual GST rate.

Please understand my 1st post 1st.....
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tiggert
post Mar 11 2011, 12:12 AM


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QUOTE(sootienann @ Mar 5 2011, 01:50 AM)
first off, GST is supposed to shift from income-based tax, to consumption-based tax.
if u do not spend, u do not get taxed.
now that we have gotten this straight, lets proceed.
in principle , government must cut income taxes when implementing GST, to show the impression of fairness.
otherwise there will be a lot of opposition.

GST will certainly cause inflation, no two ways about it.
this is because a product or service at every stage of the value-adding chain will be taxed.
it is not possible for businesses to absorb this costs, so they must pass it on to the consumer.
do not blame businesses. 100% of this mony is going to the government.

ok, so who will be affected?
the low income citizens will be affected the most.
currently if your salary is below a certain amount (i think rm 2000 per month) u wont kena taxed.
but after GST comes in , millions of low wage earners will be taxed whenver they buy something.
*
Yes, I do agree with the cutting of income taxes to show the impression of fairness. Also, I believe that basic food and some household products should be GST exempted, so that the poor will not be impacted. However, the government should ensure fairness in terms of the prices of food. These days, the food (grocery) prices are even comparable to that of developed countries. How to survive with RM2000/mth? What surprised me most is that Malaysia is categorised at similar levels with the developed countries (source from newspaper), for having the least food to income ratio i.e. 6-15%. I mean, wtf? If taking the example of a single person, just started working, who spends RM15/day for food and an average income of RM2000, that would have worked out to be 22.5%. Even at the more generous RM2,500 it is 18%. Lets take an average household income of about RM5000/mth, and an average family size of 5 people. Lets assume an average of RM40/day for food (which is very little if living in the city). That would work out to be 24%.


QUOTE(+3kk! @ Mar 5 2011, 09:00 AM)
the malaysians arr

few years ago the government removed mobile eletronics tax why no one rejoice?

then they also reduced clothing and apparel tax why no one rejoice?

why no one ask? eh why ar remove/reduce tax d still soo expensive? suddenly all keep quiet hor?

why no one seem to notice that despite teh removal of a few taxes over the years we dont seem to see a drop in price?

econs fail
*
Not only do many not understand economics, but generally, Malaysians are very "forgetful". I think many have emphasized, EDUCATION, EDUCATION and EDUCATION as the important factor for people to understand how these works. Of course, this includes too transparency from the government. But anyway, with the suppression of education and the general ignorance of the public, where can you hear voice?

In the end, all the removal of taxes, which are disguised as helping the rakyat has been enjoyed by the corporation themselves.
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b3rnard7
post Mar 11 2011, 12:24 AM


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GST = goods & service tax?

it should be Girls & Service Tips brows.gif
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Time is now: 24th April 2014 - 01:17 AM