Premium Essay

Gst Implementation

In: Business and Management

Submitted By nurfazlina92
Words 504
Pages 3
RESEARCH TITLE: THE AWARENESS OF SME’S TOWARDS GOODS AND SERVICES TAX IMPLICATIONS: A CASE STUDY OF SME’S IN SHAH ALAM, SELANGOR

INTRODUCTION

BACKGROUND OF STUDY

Goods and Services Tax (GST) is an issue frequently being discussed recently in Malaysia, this happen when the government announced to implement the GST. The national budget of Malaysia 2014 had been discussed in parliament on 25 October 2013 proposing that GST would be implemented commencing on 1 April 2015 at 6% rate. GST, is also known as the value-added tax (VAT) in many countries such as Singapore, Hong Kong, United Kingdom and Canada. Currently, more than 160 countries have implemented GST. Tax is recognized as one of the main sources of government’s income. GST has been raised by the Malaysia Government as an approach to reduce its deficit.

SMEs are defined as a business enterprise in the manufacturing sector with an annual sales turnover not exceeding RM50million or with less than 200 full time employees, while for the services sector enterprises the corresponding number are RM20 million or 75 workers. Any businesses with annual sales of taxable turnover exceeding RM500,000 is mandatory registration with Royal Customs Malaysia. With registration can allow the business owners to claim the GST paid on the purchases or inputs which will otherwise become a cost.

PROBLEM STATEMENT

The purpose of the Goods and Services Tax implementation is to solve the economics problem, this including inflation, turmoil and also unemployment. With this GST can enhancing the economic growth of the country. The huge amount of GST collected by government, the government can manage the country with more effective and efficiency. The government can use the GST collected to developing countries with build any infrastructures such as schools, transportation and hospital.

However in Malaysia, GST is about...

Similar Documents

Premium Essay

Implementation of Gst in Malaysia

...Review of Individual Income Tax In consideration of the implementation of the Goods and Services Tax (GST) which takes effect on 1stApril 2015, the government had proposed several changes to reduce individual income tax rates with effect from Year of Assessment (YA) 2015. The proposed changes are: I. Income tax rates for resident individuals is to be reduced by 1% to 3% II. Income tax rates for non-resident individuals is to be reduced by 1% from 26% to 25% III. Current maximum tax rate at 26% to be reduced to 24% IV. Two new chargeable income bands be added above the existing highest income band exceeding RM 100,000, with RM100, 001-RM250, 000 as the second highest band and RM250, 001-RM400, 000 as the highest band. V. Chargeable income subjected to the maximum rate will be increased from exceeding RM100,000 to RM400,000. Such proposed changes will bring about savings across the band for all taxpayers and so increase the disposable income for all individuals. This measure is necessary as the implementation of GST will increase the cost of living which will impact the lower income bracket the most. The proposed change will bring about a more progressive tax structure as families with a monthly income of RM4, 000 will no longer have a tax liability. Also, this will create tax rate differentials between those middle and upper-middle class families with the rich....

Words: 3421 - Pages: 14

Premium Essay

Sme Towards Implementation of Gst

...This feature, however, comes with greater administrative and compliance costs. 1.2 Problem Statement The introduction of GST in Malaysia has called for many arguments from various parties including academics, professionals and the citizens (the potential GST payers) on how GST affects the operating cost of business. The government tried to convince Malaysians that the GST will not burden them and various measures are been taken by the government to control the increase in...

Words: 5991 - Pages: 24

Premium Essay

Public Readiness for Gst Implementation in Malaysia 2015

...[pic] RESEARCH PROPOSAL EPGB6122 Title: “Public Readiness in GST Implementation 2015 - In case of Kuala Lumpur, Malaysia” Prepared by: Noorul ‘Aini Hanifa binti Su’aidi EGC140004 Masters in Public Administration Semester 2014/2015 Public Readiness in GST Implementation 2015 - In Case of Kuala Lumpur, Malaysia 1. Background Taxation is one of the important elements in managing national income, especially in developed countries and has played an important role in civilized societies since their birth thousands years ago (Lymer and Oats, 2009). The introduction of Goods and Service Tax (GST) was first announced in Malaysia Budget 2005, and then projected to be implement in January 2007. In February 2006, government has announced that the implementation would be postponed to a later date. In 2010, it was when Government finalizing the study of the implementation of GST and identifying the social impact of GST on the public and inviting many discussions among expert and GST proponents publicly. The uncertainty on GST implementation cast many doubts as to whether Malaysia needed the GST regime, and if so, what could be the public benefits to the public from this exercise. The government had putting a great effort in promoting the implementation of GST, however an attention to educate the public of GST understanding should be in place as well....

Words: 2638 - Pages: 11

Premium Essay

Gst Comparison Between Malaysia, Singapore and India

...In Malaysia the GST have been establish in a very clear manner, for example all goods and services made in Malaysia including imports supply will imposed GST. Goods and services which are categorized under zero rated supply and exempted supply will not imposed GST. This is considering as a systematic taxation system which will benefits the government and the citizens. GST ASSIGNMENT Page 1 OVERVIEW Moreover GST also eliminate or reduce all the weakness in the sales and service tax. Below...

Words: 15950 - Pages: 64

Premium Essay

Ar Rahnu

...Implementation of the Goods and Services Tax (GST) in the Singapore Construction Industry Low Sui Pheng and Carol P.W. Loi Introduction The Goods and Services Tax (GST), to be pegged at 3 per cent across the board for the first five years, was introduced by the Singapore Government on 1 April 1994. While this may just be another tax for many businesses, the rules and regulations governing the mechanism of this tax are entirely different from what companies and individuals have so far experienced from corporate and personal income tax respectively. Because GST is a transaction-based tax, it is levied at every stage of the business process and will finally be borne by the end consumers. Businesses registered for GST purposes become in essence the taxcollecting agents for the Inland Revenue Authority of Singapore (IRAS). The manner in which businesses have traditionally been conducted will need to be changed. There will also be changes to both external and internal documentation to be maintained by GST-registered businesses. Like Value Added Tax (VAT), GST is a tax on domestic consumption. It is paid when money is spent on goods or services, including imports. It is not paid when money is saved and invested in productive capability....

Words: 7476 - Pages: 30

Premium Essay

Gst: a New Tax Reform in Malaysia

...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,...

Words: 3535 - Pages: 15

Premium Essay

The Perception of Taxpayers Towards Gst in Malaysia

...The GST plan was first raised in 1988 but at the time it was considered unnecessary because the sales tax and services tax was effectively working. Therefore the plan was put on hold until it is deemed appropriate to be implemented. The GST was also included in the government policy such as in the Malaysian New Economy Model (NEM). In the NEM recommendation, GST would act as an important component in reforming the source and distribution of revenue in Malaysia because of it swider tax base....

Words: 15209 - Pages: 61

Premium Essay

Gst in Malaysia

...Goods And Services Tax (GST) is a broad-based consumption tax. It is an indirect tax which a person pays when he spends money. It is a multistaged value added tax, which means tax is charged on every supply of taxable goods and services at all levels in the supply chain i.e. production, manufacturing, wholesale and retail. More than 120 countries have already implemented GST which is paid by customers when they purchase goods and services are more sophisticated than the tax on retail sale. Even though GST is charged at each level of the supply chain, each business in the supply chain will charge tax only for the value he adds to the product in the supply chain. It will not become part of cost of the product as GST paid on business inputs is a tax credit claimable by registered business. The main issues concerning about the implementation of GST is the costs of the goods will increase which will burden the people in the country. Although the government claim that the implementation of GST will not hurt the businesses and people as the tax paid on the inputs at the previous stage is claimable or deductible, overall the the cost of goods will still increase as the producers-pass the full value added to the end consumers at the final stage....

Words: 864 - Pages: 4

Premium Essay

Literature Review

...Literature Review 1.1 Readiness, Perception and Awareness of people towards GST. The literature on the GST is extremely wide . The are many areas that can be focus on basically while doing my research . The most highlight areas on GST is on the public reaction towards GST in Malaysia before the implementation which can known their readiness , perception and awareness on GST. According to ( Mohd Rizal Palil ,2011) he has done a research in Malaysia on the impact of Good and Service Tax towards Middle Income Earners. The author has done survey towards people all around Kuala Lumpur through questionnaire. Based on the finding of his research he reveals that most of the employees does not support the government decision for the implementation of GST and also they strongly does not accept the fact that GST will be implemented in the nearest future. At the same time they strongly does not support the implementation. Based on (K. Saira ,2010) he has done a research on the awareness of the people towards GST and his finding indicates that people are not aware that GST will be charge on Goods and Services. The researcher conclude that people are not aware of GST as soon its going to be control in their life. Beside that they are not aware that it will impact on the economy very well. (K....

Words: 5096 - Pages: 21

Premium Essay

Gst in Malaysia

...Abstract The upcoming commencement of GST, the Goods and Services Tax, in Malaysia has been critically received by citizens. This study has been conducted to gauge the level of awareness and approval of GST among IIUM students. The general outlook on GST is negative, stemming from a lack of awareness as to what GST truly is and the taxpayers mindsets (Abdul Mansor & Ilias, 2013). Questionnaires were distributed to random IIUM students aimed at getting their awareness on GST and its implementation. The findings indicate that IIUM students are aware of GST and its imminent implementation and conflicting views on whether or not they approve of its implementation. Perhaps with a little scrutiny and education it might be possible to increase awareness on GST, and may change people perceptions and reception of it, be it positive or negative. 1.0 Introduction In general, Goods and Services Tax (GST) is a consumption tax which is imposed on the sale of goods and services, and it is divided into two categories indirect taxes and direct taxes and is administered by the Royal Malaysian Custom (RMC). The Malaysian government has announced that the new system which will be implemented starting 1st April 2015 at the rate of 6% (Robinson, 2014). The GST (goods and services tax) system will be replacing the present SST (sales and services tax)....

Words: 3240 - Pages: 13

Premium Essay

Level of Acceptance on Gst in Malaysia

...Abstract The Government of Malaysia on its latest Budget 2011 has announced on their intention to implement the Goods and Services (GST) tax system by middle year of 2011 and therefore, will replace the present tax system which is known as Sales and Service tax (SST). It was first announced by the previous Prime Minister, Datuk Seri Abdullah Ahmad Badawi in 2005. The primary objective of the government in replacing the previous SST system with GST is for the economy development and also to generate more revenue for the country since Malaysia is facing a bad budget deficit. Goods and Services tax is being practiced by more than 140 countries worldwide which most of the countries that are practicing it are the developing countries including our neighbors, Singapore and Thailand. However, there has been much protest, notably from the people against this new tax system. Throughout the research, it will determine on the people’s thought regarding the GST system and why are they against it. A brief explanation about GST system will be given first, in terms of the meaning and the workflow of the system as a way in conformity with their raw perception about the system before they understand it. This research will use the citizen of Malaysia as the sample. 1.2. Introduction...

Words: 3047 - Pages: 13

Premium Essay

Goods and Services Tax

...The IT Strategy for GST Empowered Group on IT Infrastructure on GST headed by Shri Nandan Nilekani Preface The broad IT plan for enabling GST was presented to the Government of India and the Empowered Committee of State Finance Ministers under the Chairmanship of Dr. Asim Dasgupta on July 21, 2010. This document is a follow-up to that presentation and feedback thereon and describes the IT strategy for GST implementation. This document is at the draft stage, and will evolve as various stakeholders and experts are consulted. 1. 1....

Words: 2956 - Pages: 12

Premium Essay

Goods and Service Tax in India

...Now, the wholesaler too, who sells it for Rs 150 will pay Rs 2 as the total GST. The retailer will then sell the product for Rs 170 and he will pay Rs 2 as the total GST with the tax credit for the good, which eventually comes up to Rs 15. It’s Implication On Tax Revenue Will the implementation of GST result in the state government to lose out? That is one issue, which States might fear about,...

Words: 2236 - Pages: 9

Premium Essay

Case Study

...Impact of GST on sub regions of Malaysia 24 2.2.1 How GST improve the standard of living 29 2.3. The implementation of GST in other ASEAN Countries 303. Implication Of Implementing GST On Economy...

Words: 12413 - Pages: 50

Premium Essay

Tax Analysis for Gst

...INTRODUCTION The Goods and Services Tax (GST) can be defined as a value-added tax that is levied on most goods and services sold for domestic consumption. The tax is implemented to provide revenue for the federal government. In Malaysia, the GST was scheduled to be implemented during the third quarter of 2011 but the implementation was delayed until the 1 st of April 2015. The Goods and Services Tax was tabled for the first time at the ‘Dewan Rakyat’ on 16 th of December 2009. Since there is a high number of criticism, it was delayed. On 25 th of October 2013, during the government’s reading of the National Budget 2014, the Malaysian Prime Minister, Dato’ Sri Najib Razak announced a GST tax of 6% will be implemented starting on the 1 st of April 2015 to replace the Sales and the Services tax. The implementation of the GST is a part of the government’s tax reform program to enhance the capability, effectiveness and transparency of tax administration and management. Since the government’s reading regarding GST in the National Budget 2014, there are a lot of reactions by Malaysians. Many of them were unhappy with the news and some of them are happy with the announcement of GST. Each party has their own thoughts and opinion in regards to the government’s implementation. In this report, we will present to you our findings for our study regarding the Goods and Services Tax. The findings in this report are obtained through two methods which are...

Words: 4702 - Pages: 19