Much ado about GST

Sunday, 12 May 2013 admin-s

Vinodhani Nair, Business Circle

We first heard about the idea of a goods and services tax (GST) back in December 2009 when it was first tabled in Parliament after close to half a decade of discussions.

To learn more about GST in Malaysia:

English: http://www.gstmalaysia.org/gstcourse/images/GST-Customs-Malaysia-GST-Malaysia-GST-Course-1.pdf

BM: http://www.gstmalaysia.org/gstcourse/images/GST%20Malaysia%20GST%20Course%203.pdf

GST, which was supposed to be implemented in Q3 of 2011, is expected to replace the current sales and service taxes in the country.

While still in the offing, the GST is said to have far-reaching implications for businesses. In a media statement released by KPMG Malaysia prior to the supposed implementation, it reportedly said: “It is not just a tax issue; it is a ‘whole of the business’ issue.”

In fact, it went on to state that no one will be exempt from the GST regime, from multinational companies to small- and medium-business owners; therefore, the business community must start to plan and manage this tax transition.

Akin to the concept of a value-added tax (VAT) practised in many countries, the GST is said to be a broad-based tax of a fixed percentage on most goods, services and other items sold or consumed in a particular country. Britain and Australia have already introduced VAT or GST, and nearer to home, Singapore has implemented GST for a while now on most goods and services.

Simply put, a business or person who has registered and incorporates GST in the sales pricing to his/her customer, can claim credit for the GST included in the prices of business purchases. Therefore, a retailer, for instance, will remit the net GST on the value-added element of the goods or services. However, it is the end user or customer who will be bearing the ultimate GST and, in fact, a business concern does not bear the economic cost of the tax.

KPMG said that “to achieve an effective GST implementation, it is vital that each business must understand how GST will impact at pre- and post-implementation levels. In this respect, not only must businesses pay attention to achieving compliance with the GST law and regulations, but it is also pertinent to consider whether there are any opportunities that should be pursued. GST is here to stay and risk management of GST issues must be part of the organisation’s risk management process.”

Read more at: http://www.businesscircle.com.my/much-ado-about-gst/