BUDGET 2014: GST, WHY EXTRA CENTS MAKE SENSE OK, worried about the implementation of the new Goods & Services Tax (GST) next year…well don’t be! The GST is a broad based tax system that is designed to spread the load of tax collection by the government across a greater percentage of the nation’s population. Those that will be affected the most will be those who have higher levels of disposable income as the tax is directly linked to consumer expenditure. Don’t spend and you don’t pay the tax. Now that maybe a simple analogy but to compensate lower to mid income earners, the government has “zero-rated” a number of essential goods & services in which no GST is applicable. Things like rice, vegetables, budu, belacan, public transportation, property, financial and education. In addition, the levels of tax free thresholds will be increased and personal income tax rates will be reduced so most Malaysians will have more disposable income to enjoy. Another big bonus is the removal of “hidden” taxes that we currently do not see but pay for. Manufacturers are charged 10% sales tax on the goods they use to manufacture items. Retailers at the time you purchase goods, also charge a 10% sales tax. Under the GST system, both of these hidden taxes will be removed. In a nutshell, the new GST is fair and equal system of tax collection that will see all Malaysians participate in producing more taxation revenues for the government. Now, the only thing you need to concern yourself with is, how the government makes best use of the increased revenue they will be afforded. What do you think they should focus on more…debt reduction, education, health or infrastructure?
Posted on: Wed, 30 Oct 2013 04:30:00 +0000
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