September 18, 2013
SEPT 18 — “Goods and Services Tax ( GST ) is no longer an option,” said the Ministry of Finance’s Secretary General, Tan Sri Dr Irwan Serigar Abdullah.
It was the last four words in that sentence that created huge waves in the local media, foreign wires and not forgetting the continuous thunderbolts in the social media space.
If I were to paraphrase what he said – there is just no escaping the GST. The big question mark is when will it be implemented and what would the rate be?
The uncertainty to both these questions led to a sudden surge of unofficial opinion-makers. And it came as no surprise that the digital public sphere was suddenly crowded with instant economists, sharing their thoughts and views on GST’s presumed rate, mechanisms and the so-called implications.
It didn’t matter whether what they said actually made sense or not. What was important was that they could contribute to the GST Conversation and say their piece. Whether it was right or wrong – that’s secondary!
After several sessions of surfing, I eventually switched off, as too much rambling and having to sift the truth from garbage becomes just as tiring as real surfing in Brisbane’s Gold Coast.
The next thing I did was to sign up as one of the participants at the GST Training and Awareness Programme organized by MOF and Customs. It was my hope that after the learning session, I could speak intelligently on GST and demystify some of the conflicting views and misinformation that have caused and roused public outcry.
Articles on GST so far, have not been spinned positively. I use the word spin because logical thinking will tell you that the GST cannot just be all Bad and Horrible without any benefit to the nation and its people.
Assuming it was all bad and ugly, then why have more than 170 countries adopted this taxation system? It wouldn’t have made sense, right? But unfortunately, in the Malaysian scene, the GST has received nothing but serious backlash.
I personally think that most people are still very much perplexed about what to expect, cannot fathom what our bills are going to look like and how badly our pocket is going to bleed.
Let’s face the fact – not everyone likes surprises, especially not when it has everything to do with financial implications and nothing to do with your birthday present.
Question: Is it really going to be as bad as it has been hyped up by our instant economists in the social space? Well, let me share some of the takeaways from the training session.
First, in terms of taxation system, we are so behind, that even Laos and Cambodia have overtaken us in implementing the GST.
Officially, we belong to the last 20 per cent of countries who have not yet adopted the GST system. I’d say, it is quite embarrassing to admit that our taxation system is superiorly outdated.
The current system, which has inherent weaknesses, is neither transparent nor efficient. To begin with we are paying double taxes: 10 per cent sales tax + 6 per cent service tax. With GST, we only need to pay one. So, how bad can that be?
Secondly, because the current taxation system is opaque, there are instances where duplications of taxes occur between sales and goods tax.
As a retailer, you will not realize the multiple taxes that you are paying as the taxes have already been embedded in the end product – and because the different taxes are not stated in your receipt, people seem to just accept without further questions.
The truth is, GST is designed to reduce business costs and provide absolute transparency of taxes at each stage of a business transaction – all the way up to the retail stage of distribution.
With this new system, business owners are able to reduce cost of running their business and by right, should be passing down the savings to customers like us.
Business owners can claim their input taxes back and offset it with the output tax. Mathematically speaking, if there are cost savings at their end, then the cost reduction should also be passed on to us, their retail customers too.
After all, the GST is said to be more efficient, business friendly, transparent and is designed to reduce business costs. It gets better doesn’t it?
Without getting too technical, there are three types of GST taxes – the standard rated, the zero rated and items which are totally exempted from GST.
How does that translate in simple terms? It simply means that some items will remain unchanged, some will increase in price and some will reduce in pricing.
Most importantly, what I took away yesterday was that the country needs to broaden its tax base and reduce reliance on petroleum revenues.
The GST is a more sustainable way of revenue collection - which, in turn, will be ploughed back for the development of the country and its people.
Furthermore, the GST has a greater coverage and it will vary from person to person. This means that everyone will feel the pinch of the GST, but it really depends on what they consume and how often they consume each and every item (except the 40 items which are GST free).
If you are still in doubt, you might just want to ponder these bottom lines.
Malaysia needs to :
Be on par with other nations who have adopted the GST system.
Replace its outdated taxation system to a more efficient one.
Think of its future generation who cannot just rely on petroleum revenues which are unsustainable in nature.
Lastly, it is pointless to just sit back, read and believe everything that is posted on the web. Because smart is when you believe half of what you hear and brilliant is when you know which half to believe.
The GST is imminent. The force will come, but it will not be the end of the world.
Brace yourselves now @ www.gst.customs.gov.my
The wealth of information is there for you to consume and digest at your own rhythm and pace. Happy reading.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malay Mail Online.
- See more at: http://www.themalaymailonline.com/what-you-think/article/biting-the-gst-bullet-omar-mukhtar#sthash.6OQ5O1Z4.dpuf
No comments:
Post a Comment