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Gst: a New Tax Reform in Malaysia

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International Journal of Economics Business and Management Studies - IJEBMS ISSN: 2226-4809; EISSN: 2304- 6945 Vol. 2, No.1 (January, 2013) 12-19 Indexing and Abstracting: Ulrich's - Global Serials Directory

Goods and Services Tax (GST): A New Tax Reform in Malaysia
Nor Hafizah Abdul Mansor Faculty of Accountancy Universiti Teknologi MARA (UiTM), Malaysia Email: Azleen Ilias College of Business and Accounting, Universiti Tenaga Nasional (UNITEN), Malaysia Email: Abstract The Goods and Services Tax (GST) is becoming one of the most prominent topics in Malaysia. The announcement by the Malaysian Ministry of Finance (MOF) in the Budget 2010 on the implementation of GST had created various reactions from practitioners, academicians, general public and most important businesses. GST is one of the tools that are proposed by the Government to reduce continuous deficit budget in Malaysia. This paper discusses the GST as a new tax reform in Malaysia, and covers several issues in order to enhance the understanding and readiness among Malaysian in adopting GST. Keywords: Tax reform; GST; budget deficit. 1. Introduction The introduction of Goods and Services Tax (GST) was first announced in the Budget 2005 in order to replace the existing sales and services tax structure in Malaysia. This new tax reform is projected to be implemented in January 2007. However, the Government has announced on 22 February 2006 that the implementation would be postponed to a later date. Recently in Budget 2010 the Government is currently at the final stage of completing the study on the implementation of GST, particularly to identify the social impact of GST on the rakyat. The implementation of GST will witness that, not only on manufacturing and services sector would be affected, but also include other sectors such as education, health,...

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