Gst In Malaysia

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Background and Introduction

GST is known as a government goods and services tax. It is a Malaysian value-added tax levied on most of the goods and services that is sold for domestic utilization. The establishment of Malaysian GST levied on 1st April 2015 by our prime minister Dato’Sri Haji Mohammad Najib bin Tun Haji Abdul Razak is in order to make revenue for the federal government. The main source to generate the GST levied is from the goods and services tax paid by the consumers. The GST rate that is imposed by the Malaysian government is 6% which is the lowest rate compared to the other ASEAN countries. The Malaysian goods and services tax (GST) is not for every goods and services that is offered in each state in …show more content…

As overall, GST is a value added tax that implements to replace the sales and services tax (SST). The welcoming of GST or goods and services tax in Malaysia, believe that first of all will increase the monetary value. Before implementing the GST, the SST makes an increase in the inflation rate. Inflation is actually the increase of an overall price due to the multiple taxes charged within the process of each system in processing of goods and services. When GST implemented, GST take over all the multiple tax that was charged differently which was not fair to most of the consumers who are obtain goods or services. By implementing GST, each consumer need to pay a fair tax either they obtain a huge amount of items and services or less amount of items or services. This will eventually increase or raise the monetary value for the Malaysian government. The incremental might possible happen because all the consumptions of goods and services need to pay GST tax. (Anita, Doraisami, 2000). Therefore, everyone who stays in Malaysia adding with foreigners who visit Malaysia have to pay GST which will increase the revenue or monetary value of the country. As view on the long term economy perspective, GST as a more effective and efficient tax system will assist in decreasing the fiscal deficit in Malaysia. On the other hand, administration of GST brings a greater harmonization which will lead to a greater …show more content…

It is believed that the establishment of GST expected to boost the government’s income and the dependence on oil revenue will be lessen. Moreover, GST is focus to decrease the universal administration slippage which attack a more than 20-year high of 7.4 per cent of gross domestic product in 2009. Besides, the revenue tend to rise to RM1bil in the first year and help the business and industry sectors to save Rm4.1bil and export sector will save for Rm1.4bil after the implementation of GST in Malaysia. On the other hand, Malaysia as a developing country it is important to review its fiscal policy. Malaysia should also need to prepare for any possible economic dilemma to magnify the competitiveness in the global market. The ideas of implementing GST can overcome all its fiscal policy issues and competitiveness in the global market. As an overall, it can tend to increase the living standard of the impecunious and at the same time the more equitable society can be

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