... 6 1.3 Why is GST implemented 8 1.4 Difference between GST and SST 9 1.5 General operations of GST 10 1.5.1 Goods and Services Tax (Zero-rated supply) Order 2014 11 1.5.2 Goods and Services Tax (Exempt supply) Order 2014 132. Content 14 2.1 Effect of implementation of Goods Services Taxes (GST) in Malaysia 14 2.1.1 GST are regressive tax or progressive tax? 14 2.1.2 Effect of implementation of GST on inflation based on CPI 16 2.1.3 Effect of implementation of GST on the household income 19 2.2. 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...
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...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: norha058@johor.uitm.edu.my Azleen Ilias College of Business and Accounting, Universiti Tenaga Nasional (UNITEN), Malaysia Email: Azleens@uniten.edu.my 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...
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...TOWARD GOODS AND SERVICES TAX (GST) IMPLEMENTATION IN MALAYSIA CHAPTER ONE - INTRODUCTION 1.1 Backgroud of Study Malaysian taxation system is generally divided into two, which are direct taxes and indirect taxes. Indirect taxes are controlled by the Royal Malaysian Custom Department (RMCD) and it consists of four components such as excise duties, customs duty, sales tax and service tax. Direct taxes are under the control of the Inland Revenue Board of Malaysia (IRBM). The IRBM is responsible for all policies relating to direct taxes such as income tax of individual and business, petroleum income tax, real property expansions tax, and stamp duty. From the government perception, taxation is a vital economic tool because it can be employed to regulate the economy, to invigorate economic growth through the granting of fiscal incentives as a principal aim of implementing tax policies and to provide funds for development projects (JeyapalanKasipillai, 2005). The contribution of direct taxes and indirect taxes to government revenue in 2009 amounted to RM78.375 billion (49.4%) and RM28.129 billion (1 7.73%), respectively. This shows that taxation contributes more than 60% to the Malaysian government revenue. Recently, the Malaysian government established the implementation of goods and services tax (GST) to replace Sales Tax and Services Tax (SST). 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...
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...of GST GST (good and service tax), other words it also known as VAT (value added tax). It have implemented in many countries throughout the world. Currently there are 170 counties in the world that have implemented GST /VAT. NO REGION No of country 1 ASEAN 7 2 Asia 19 3 Europe 53 4 Oceania 7 5 Africa 44 6 South Africa 11 7 Caribbean, Central and North America 19 Table 1: No of countries implement GST/VAT Sources: Ministry of Finance GST is a multi-stage tax system, this is due to its nature which the tax is collected based on the supply of goods and services at each of the supply chain from the supplier to the retailer stage of the distribution. Even though GST is imposed at every stage of the supply chain, but the tax element will be not become a part of the cost of the product, because the GST paid on the business inputs is claimable as input tax. Where the business will pay the GST as output tax and claim for the input tax from the customs. In addition, it does not matter how many stages where a particular goods and services goes through the supply chain because the input tax incurred at the previous stage is always deductible by the businesses at the next in the supply chain. GST consider as a broad based consumption tax, which includes all sectors of the economy. In Malaysia the GST have been establish in a very clear manner, for example all goods and services made in Malaysia including imports...
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...The Malaysia Goods and Services Tax (GST) Royal Malaysian Customs Department (2013) state that the government does implement the GST is because the existing consumption sales tax is unsatisfactory. There are also a reduction in the rate other taxes is sought. The existing tax system has not kept pace with the development of the economy. This is because they want to avoid tax cascading, multiple taxation and transfer pricing bias (Ministry of Finance Malaysia, 2014). Next, when they want to enhance tax compliance as well as to reduce tax avoidance and tax evasion, they have to avoid the issue of transfer pricing and value shifting. Then, they want to implement self-policing, lessen the bureaucratic red tape(Ministry of Finance Malaysia, 2014). Moreover, they want to lower the administrative cost and to enhance Malaysia’s competitiveness and to improve efficiency, Prices of Malaysian exports will become more competitive on the global stage as no GST is imposed on exported goods and services, while GST incurred on inputs can be recovered along the supplies chain. This will strengthen our export industry, helping the country progress even further (Ministry of Finance Malaysia, 2014). Thus, the GST will enhance the capability, effectiveness and transparency of tax administration and management. In addition, it will help the government find new sources of revenue. Malaysia Goods and Services Tax (GST) Royal Malaysian Customs Department 2013, Why GST?, Malaysia Goods and...
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...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. Saira ,2010) There is also another research which is concerning about the perception of Tax Payers on GST by (Tan Mei Lian ,2010) .The author has also done survey questionnaire towards people randomly. Based on the researcher finding it show that many people feel that it is not...
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...WITHHOLDING TAX INTRODUCTION Imposed on non-residents on services rendered by them. The payer as an agent, to withhold a portion of the payment ‘withholding tax’ and pay to the tax authorities. Net payment Non-resident Withholding tax Payer Tax authorities SCOPE OF WITHOLDING TAX Withholding tax is only restricted to the following types of payment made to non-resident: (a) (b) (c) (d) (e) (f) Special classes of income (S 4A) Interest (S 15) Royalty (S 15) Contract payment (S 107) Public entertainer (S 109A)’ Other income in S4(f) (S15B) Type of Income Charging Section WT Section/Rate Interest 3/4(c) 109 - 15% Royalty 3/4(d) 109 - 10% Contract payment 3/4(a) Public Entertainer Rem. 3/4(a)/4(b) 109A - 15 Special classes of income 4f 109B - 10% Non-Exempt Interest to individual 4(c) 109C - 5% resident NR R 107A - 10%+3% Sec. 4A Income. Interest. Royalty. Contract Payment. Public Entertainer’s. Remuneration. Net Payment Payer NonResident •Within 1 Month of Paying or Crediting. •Crediting means “making available to” and not crediting in the accounting sense. Tax Authorities SCOPE OF WITHOLDING TAX The non-resident would only be liable for withholding tax if all the following factors are present: (i) The recipient is a non-resident; (ii) The income has to be one of the categories in the scope; (iii) Such income has to be deemed derived from...
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...12TH October 2015 DUE DATE : 12TH October 2015 Produced by STUDENT NAME & ID: No. | Name | Student ID | Contribution | 1 | TRINH HONG DUONG | 1000924085 | 1(A) | 2 | GAO ZIYI | 1001233382 | 1(B) | 3 | YAO TONG MEI | 1001233058 | 1(C) | 4 | OMUVWIE NYERHOVWO | 1001130432 | 1(D) | 5 | YONG YIP HEE | 1001130054 | 2 | 6 | TANG CARMEN | 1001130031 | 2 | 7 | LEE CHEE KUAN | 1001129097 | 2 | TABLE OF CONTENTS 1(A) | Bright Sdn Bhd’s basis periods for the years of assessment (YA) 2015 and 2016 | | 1(B) | Bright Sdn Bhd have Permanent Establishment (PE) in Hong Kong | | 1(C) | the Income Tax Implications and Treatment for Bright Sdn Bhd during the 24 months | | 1(D) | Mr Kan Lek’s Malaysian Residence Status and Tax Treatment of years of assessment 2015, 2016 and 2017 | | 2.0 | Goods and Services Tax (GST) | | 2.1 | Standard Rated | | 2.2 | Zero Rated | | 2.3 | Exempted Rate | | 1(A) Bright Sdn Bhd’s basis periods for the years of assessment (YA) 2015 and 2016 Bright Sdn Bhd has been carrying on business for a number of years and prepares its accounts up to 31 June each year. Its basis period for the year of assessment 2013/2014 is from 1 July 2013 to 30 June 2014 (section 18B(1)). But in 2015, Bright Sdn Bhd intends to change its year end to September 2015, thereafter annually year end of Bright will be changed to September. As a restult, Bright Sdn Bhd's basis period for the year assessment 2015 is 1 July...
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...Malaysian Tax System [pic] |Tax System | | | | . |Tax Legislation | | . |Individual Taxation | | . |Corporate Taxation | | . |Self Assessment System | | . |Real Property Gains Tax | | . |Witholding Tax | | . |Indirect Taxes | | . |Investment Incentives | | | | |2006 Important...
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...11 3.5 EXPECTED RESULT 12 4.0 DISCUSSION AND CONCLUSION 12 5.0 REFERENCES 13 1.1. 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...
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...Science; Vol. 9, No. 11; 2013 ISSN 1911-2017 E-ISSN 1911-2025 Published by Canadian Center of Science and Education Elements of Compliance Costs: Lesson from Malaysian Companies towards Goods and Services Tax (GST) Mohd Rizal Palil1, Rosiati Ramli1, Ahmad Fariq Mustapha1 & Norul Syuhada Abu Hassan1 1 School of Accounting, University Kebangsaan Malaysia, Malaysia Correspondence: Mohd Rizal Palil, School of Accounting, Faculty of Economics and Management, University Kebangsaan Malaysia, 43600 Bangi, Selangor, Malaysia. E-mail: mr_palil@ukm.my Received: May 6, 2013 Accepted: June 20, 2013 Online Published: August 30, 2013 doi:10.5539/ass.v9n11p135 Abstract URL: http://dx.doi.org/10.5539/ass.v9n11p135 Various parties including academics, professionals and the society (the potential GST payers) are arguing about the introduction of GST in Malaysia. Goods and Services Tax (GST) or Value Added Tax (VAT) is a consumption tax imposed on the sale of goods and services. The Malaysian government introduce this potential tax mechanism, in order to increase the existing tax bracket and replacing the long-implemented service and sales taxes. With the introduction of GST, the Malaysian government felt it would provide them with the prospect to reduce the rates of individual and corporate income tax. However, do all companies particularly small and medium enterprises (Companies) ready to adopt the systems efficiently? If they could adopt the system, how much their compliance costs...
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...CONTENT No.2 Title Page 13fewfqefqefqewf Introduction 1fqefqwefqeqef 2eqfewfwefefqefqefeq Findings – Tax Advisors 2wfqwefqewfqwefqefqw 3efqwefqewfwqefqwefqwef Findings – Individual 7efqwefwefwefwefweqfqwefq 4wefqwefqwefqwefqefq References 18wefqewfqewfqwefqwefqwefqwe fqwefqewfq 5wefqwefqwefqwefqwefqwefqwef Appendix 19qwefqwefqefqefqwefefwefweqfwefwqefwef 1. 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...
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...Tutorial 1 Dr. Nakha Ratnam Somasundaram Sales tax and service tax Question 1 What do you understand by sales tax? Answer 1 It is form of indirect tax imposed on consumers and collected by enterprises. It is accounted by the enterprises to the Royal Malaysian Customs and Excise Department. Question 2 What is the scope of charge of the sales tax under the Sales tax Act of 1972 (as amended)? Answer 2 Section 6 imposes the tax. Under that section, sales tax shall be charged and levied on all taxable goods: a) Manufactured in Malaysia or acquired under the provisions of section 9 by a taxable person and sold used or disposed of by him, otherwise than by sale or disposal to a licenses manufacturer authorized by the Director General to acquire such goods without payment of tax b) Imported into Malaysia by any person for home consumption It is a single stage tax. A single stage tax means it is imposed only once. And it is imposed upon acquiring manufactured products from manufacturers or by Customs when the goods are imported from outside Malaysia into Malaysia. At the manufacturing stage, the tax is imposed at the output level. The taxes are collected and paid over to the Customs by the manufacture. In the case of import the importer would pay the tax to the Customs. However a manufacturer acquiring a product form another manufacturer for additional processing would not be liable for sales tax and where such taxes are paid, it could be recovered...
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...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). In the current tax regime, the 10% Sales Tax and 6% Service Tax is collected by one party (usually the seller) and passed on to the tax authorities. For instance...
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...Doing business in Malaysia Contents Foreword Chapter 1 - Introduction • • • • • • • • • • • • • • • • • • Geography & population Advantages of investing in Malaysia Language Political environment Economy Major exports and imports Import controls Regulatory environment Financial services Currency denomination Exchange controls Government policy on foreign investment Communications 5 6 Chapter 2 - Intellectual property protection Patents Trade Marks Industrial Design Layout Design of Integrated Circuits Geographical Indications 19 PKF – Doing business in Malaysia 2 Chapter 3 - Business Structure • • • • • • • • • • • • • Types of business structures Companies limited by shares Companies limited by guarantee Foreign companies and foreign investments Sole proprietorship and partnerships Trusts 24 Chapter 4 - Business Finance Equity financing Loan Funding Grants & soft loans 28 Chapter 5 - Investment Incentives Manufacturing Multimedia Super Corridor Status Operational Headquarters International Procurement Centres / Regional Distribution Centres 35 Chapter 6 - Accounting • • • • • • • • • • • • Statutory Accounting Requirements Audit Requirements Accounting Standards 60 Chapter 7 - Taxation Overview of taxes in Malaysia Scope of taxes: Residency Sources of income liable to tax The Tax Year Payment of Tax Corporation tax Interest Deductions Interaction with International Tax Regime Taxation of Partnerships & Trusts ...
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