Advantages of GST implementation in Malaysia :In Malaysia GST is imposed on goods and services at every production and distribution

stage in the supply chain including importation of goods and services. GST stands for
Goods and Services Tax and it is a consumption tax based on the value added concept.
The implementation of GST will not be a burden for citizens beacause GST is only the
replacement of the existing sales and service tax which has the higher rate compared to
GST. In fact, GSt might actually ease the burden for Malaysian citizens.
Besides that, tax burden of citizen will not increase when income level increased as the
income tax rate would not be increased thus this would not be a burden to taxpayers.
CONSUMER
The existing Sales and Service tax (SST) inherent weaknesses such as compounding
effects, transfer pricing and value shifting thus GSt is implemented to eliminated these
weaknesses and to enhance effectiveness and efficiency of the existing taxation system.
Gst is proven to be a better tax system because GSt will be administered i a fully
computerised environment therefore speeding up the information delivery such as refund
claims. Moreoever GSt couls provide fairness and equality as the taxed are levied fairly
on the businesses involved such as wholesaling,manufacturing,service sector or retailing
and provide better transparency to consumers as they will know exactly whether the
goods or services they consume are subjected to tax and the amount they pay for it, unlike
the present sales tax.
GST provide fairness and equality to everyone as the impementation of GST and the tax
burden is spread over instead of just relying on the income tax derived from the working
population.Beside that all these benefits provided buy the imposed of GSt could stimulate
the economic growth and increase the competitiveness in the global market.
The implementation of GSt impaacts consumer with the price control and anti
profiteering act 2011. The Antiprofiteering Act is effective on 1 april 2011 which is
governed by KPDNKK to make sure that trader and dealer does not increase price
arbitrarily. The Price Monitoring Council is a special commitee established to comabt
profiteering.
Besides that GST impacts consumers by being their shoppers guide. GST teaches
consumer to compare prices of goods and services beore and after the implemetation of
GST. GST is also a price setter as goverment will get the assistance from the hypermarket
to be the price setter for the benefit of the consumers.

BUSINESSES
Flowchart of GST
for businesses

Businesses do get
benefits from the
implementation of
GST as the GST
paid
on
the
business
inputs
can be claimed as
tax credit. As such,
it is estimated that
the cost of doing
business
wil
decrease by an
amount
of
RM4.3billion
inclusive of a
saving
of
RM1.4billion by
exporters on their
business inputs.
The reduction in
the business costs
will make the local
products
and
services
more
competitive in the
domestic
and

international markets. GST is also expected to improve tax compliance and is easier to
administer due to its self-policing feature. With the impose of GST, bureaucracy in the
goverments delivery system will be significantly reduced.
The impementation of GST would alo not burden the businesses even when GST is
imposed at every level of the suppply chain. The tax element would not become the part
of production costs as the GST pai on the inputs by the businesses is claimable. Hence,
the cost of production of the businesses would not be affected as the input tax incurred at
the previous stage would always be deducted by the businesses in the next step of the
supply chain, so it does not matter how many stages where a particular goods and series
go through.

Reduce cost of
doing business

Description
Reduction in corporate tax rate by
1%.
Reduction in cooperative tax rate by
1% to
2%.
Secretarial fee and tax filing fee tax
deductible up to RM 5,000 & RM
10,000
respectively.
Accelerated Capital Allowances
(ACA) for ICT
equipment and software is extended.
Expenses for GST- related training in
accounting & ICT given further

Effective
YA 2016
YA 2015
YA 2015

YAs 2014 to 2016

deduction.
Financial assistance

Increase disposable
income

Financial assistance

YAs 2014 & YA

2015
RM 150 million allocation for 2014 & 2015
purchase of
accounting software by SMEs
Training Grant of RM 100 million for
GST
2013 & 2014
Training
Personal tax rate reduction across tax
bands
by 1% to 3%
Highest marginal tax rate reduced
from 26%
to 25%
YA 2015
Restructuring of income tax band s by
increasing chargeable income subject to
maximum rate from above RM 100,000
to
above RM 400,000
One-off cash assistance of RM 300 to
2015
households who are BR1M recipients