GST

to understand how gst works

GST means government service and tax. GST was scheduled to be implemented by the government during the third quarter of 2011, but the implementation was delayed until 1 April 2015. Its purpose is to replace the sales and service tax which has been used in the country for several decades. The government is seeking additional revenue to offset its budget deficit and reduce its dependence on revenue from Petronas, Malaysia's state-owned oil company. The 6% tax will replace a sales-and-service tax of between 5–10%.

Why the Government wants to implement GST? Why now?

Many countries have adopted GST / VAT because they were unhappy with the structure of their consumption tax. Dissatisfaction is widespread fall into one and possibly all of the following categories:

(I) sales of existing application does not satisfy

(Ii) Reduction in tax rates and other sought

(Ii) the existing tax system is not in line with economic development

n the case of Malaysia, the introduction of the GST is part of the Government's overall tax reform program towards making tax systems more efficient, effective, transparent, business-friendly and capable of generating a stable source of revenue. GST is to replace the current consumption tax consists SST. According to a survey conducted by the Ministry of Finance, the GST can overcome the inherent weaknesses in the SST namely:

(I) Cascading tax and compounding tax

(Ii) The issue of transfer pricing and the switch

(Iii) There is no full tax relief on goods exported 

(Iv) Promote vertical integration

(V) The bureaucratic red tape

Why now? Today there is a wealth of experience to capitalize. In other words, the chances of success in implementing the GST is high because there is a lot of experience for Malaysia to attract them around the world in designing the system. Over the years, GST / VAT was adopted as one of the main forms of taxation. At present, more than 160 countries have implemented GST / VAT.