If any RBA is telling you that GST will make the government an extra RM23billion, tell them that they should go back to school. The GST of 6% is expected to generate RM21-23billion a year BUT it has to be offset with reduced tax and additional spending elsewhere. The NETT benefit is expected to be between RM1-5 billion and mainly from people who have evaded tax in the past. This is because the govt will lose at least RM16 billion a year from cancelling the current Sales and Service tax. The govt is also going to lose undisclosed billions from reductions in corporate and personal income tax. And the govt will also be spending many billions extra on the OFF-SET package and additional BR1M to cushion the low to middle income groups from the effects of GST. The Low income group is expected to be a nett benefit of the GST as they will receive more money than they will spend on GST. The number one aim of the GST is to restructure our tax system to make Malaysia more competitive and efficient, tax-wise and allow us more flexibility and resilience to manage our economy better. Tell the RBA that they need to understand the difference between GROSS and NETT receipts. ---- Note: why is the tax-system more resilient? Simple..Majority govt revenues either comes from corporate or personal income tax or petroleum revenues.and if Malaysia gets into a bad recession and corporate and income taxes drops tremendously or if Petroleum prices plummet then Malaysias budget will be affected. A GST-tax on consumption will be more reliable as this is based on consumption and not income and it is thus more predictable.
Posted on: Sun, 08 Jun 2014 17:14:44 +0000
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