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Taxation 2

In: Business and Management

Submitted By adrianngee
Words 1778
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Malaysian government has implemented a new tax called Goods and Service Tax (GST) in 1st April 2015. What actually is GST? GST is a multi-level secondary tax imposed on local consumption or products. It is also acknowledged as Value-Added Tax (VAT) in other countries. Many other neighbor countries of Malaysia have already been implementing GST for a very long time. It is a wide based tax which will be taxed on what you have spent, and this will have an effect from all parties of the product from manufacturing to the very last stage sales. GST is charged based on a tax-on-value-add which escapes from tax repetition. GST have a different characteristics compared to the Sales and Service Tax (SST), which SST is only added one time. GST was firstly proposed by the government in 2011 to substitute the current SST, but was met with much opposition from the community, partially due to the effect of a price raise in essential goods, but also partly due to the deficiency of transparency around the current consumption tax systems in Malaysia. Not every goods are taxable from GST, most essential goods are exempted from being tax by GST and so the current Malaysia had implemented GST. The Government’s choice in implementing GST is correct, it is because the prices of crude oil have decrease more than 50% from a benchmark of USD100 per barrel in the year 2014.
PETRONAS funds a certain sum of dividend to the government every year. The quantity of dividend paid is highly reliable on the global crude oil prices. For an instance, when the price of crude oil is to be around USD100 per barrel, the income from PETRONAS dividend and petroleum tax revenue total to be a RM62 billion. The situation had changed when the price of crude oil decrease to about USD50 per barrel. The impact from PETRONAS and oil-related sectors will be only RM44 billion in the year 2015. As oil prices are...

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