Yet, it might stimulate the whole sector along with an economic growth afterward. Generally, GST implementation is deemed to have no adverse effects on equities in the long run. The implementation of GST provides a reliable source of national income and stimulates the growth of manufacturing industry in Malaysia. This will eventually attract the foreign investors to invest in Malaysia which create a constant cash inflow to the country. The economy growth will be significant which benefit to the financial services
It will be levied at every stage in the supply chain and all the taxes paid previously will be credited. GST will be levied in two parts, State GST (SGST) and Central GST (CGST) to ensure proper revenue sharing between the central and state governments. Implementation of this tax reform is expected to end the drawbacks of the current tax system such as the cascading effect of taxes etc and thus lower the overall tax rate. Similar tax systems have already been implemented in multiple countries which have witnessed significant growth in their economies because of the same. Currently, the warehousing and logistics decisions in India are primarily based on tax saving considerations rather than on achieving operational efficiency.
The merger of service tax in GST helps to ensure not only a more comprehensive input tax credit but also relieves the tax on exports. The State GST will expand the base of the prevailing VAT to include services and the tax will be simplified by merging a number of other taxes such as motor vehicles tax, entertainment tax, goods and passengers’ tax, electricity duty and entry taxes including those levied in lieu of octroi referring to the local taxes on the entry of goods into a municipal area for consumption, use or sale. A significant gain in minimizing distortions and reducing compliance cost for taxpayers can be brought about through the harmonization of tax rates and administration across the
The less developed states will get a push: As per the previous tax system the state can keep 2% of the production tax which is very low if we are thinking of transformation of some poor states. But with the changing GST state government will get a heavy chunk which will help them for the development of the state. Now, like the advantages, there are some disadvantages of the system too. We are going to discuss them below. Disadvantages of GST: 1.
GST will Unifi and integrate these tax reforms to a common base. This tax regime aims to convert the country into a integrated market by eliminating various taxes and replacing them with one tax. GST has dual structure that is central component levied and collected as the central goods and service tax(CGST ) and service taxes on goods and services that move from one state to another is state goods and service tax (SGST). Once the GST is introduced in states the states complain about the loss of revenue, so there are provisions made to compensate for it. The compensation may extend upto 5 years.
All countries have their own policies on collecting taxes from their people, and most of the business are paying multiple taxes and higher levels of taxes that will ultimately borne by the consumers, ended up high price of goods and discouraging business activities environment. Besides, GST do provide effectiveness and transparency on preparing accounts. It helps to build corruption-free tax administration when all taxes are integrated and systematic. Moreover, most nations that adopt GST will able to predict income from collecting taxes from the people due to the effectiveness of taxing system, it will help build the nation’s wealth and has the ability to repay debts, if there is any. Besides, GST create a fair and equate taxing system towards companies.
It now appears as though this might become reality as GST, the replacement of Sale and Service Tax (SST) was implemented with a standard rate of 6% and was effective from 1st April 2015. The implementation of GST aims to strengthen tax compliance, through simpler and more transparent tax system to increase the efficiency of current taxation system. On top of that, government is looking ways to rein back national budget deficit by diversifying its source of income and less dependence on oil revenue. GST would have profound impact on low and middle income households than high income households. For families in lowest earning group, their monthly income are RM605 and contribute 2.62% of GSTI.
It means that poor families can maintain their life by selling their products, so the rate of poverty does not increase. In another way, if the KRG aids to improve agriculture, farmer or government can send their products to abroad,so it is another way to fix the economic issues. Consequently, government should encourage people who leave the village to go back and start farming because it is away to the growth agriculture system in
And there is one more problem, according to me, is that they should also spend money on the government schools in the rural areas because there is a lot of poverty still in India and not many people can afford to send their children to private schools. But then there is also issue of money. There are a lot of issues related to money. But for a better future of the children of their countries they government needs to be more generous and pay a big amount from their GPD for
GROUP ASSIGNMENT ECO415 TITLE: MARKET EQUILIBRIUM AND PRICE CONTROLS Lecturer: Mdm. Tan Nyuk Chin Submission date: Week 12th Group members: Shazanna Nur Atiqah Binti Mulkan (2014710021) Shakina Vedora Yafle (2014743357) Sitti Norsarina Binti Amirullah (2014982055) Lizawati Saran Baru (2014324799) Group: AS2011A1 a) Many arguments arise with the implementation of Goods and Services Tax (GST) in Malaysia recently. Discuss the advantages and disadvantages of this policy towards Malaysian consumers. Advantages • Fairer pricing Under GST, the consumers will pay the same amount of tax which is 6% to certain particular goods and services. GST will eliminate the double taxation under SST.