Monday, October 21, 2013

GST experiences in other countries


By : NewsDesk
Date Posted : Sunday 20-Oct-2013

Many countries are already using the Goods And Services Tax (GST), otherwise known as the Value Added Tax (VAT). 

In Malaysia, the government intends to replace the existing current sales tax (generally at ten percent) and the service tax (six percent) with the GST.

The 160 countries which have adopted this system have proven that it works well with the public and their respective governments.

Let’s look at Australia, which has used the system for the last 13 years. When it was implemented in the year 2000, there was corresponding reductions in personal income taxes, state banking taxes, federal wholesales tax and some fuel tax.

In Canada, the GST replaced the Manufacturer’s Sales Tax in 1991 while New Zealand it started in 1986. No GST is charged on basic essentials and it will be the same in Malaysia once it is implemented here.

In the European Union, the GST is better known as the Value Added Tax (VAT) and many foreigners who have travelled there will be familiar with the system of claiming back the VAT at the airport on goods purchased in their country.

GST or VAT is another one of many taxes that most countries will have. That is in addition to income tax, business tax, road tax, property tax, capital gains tax, council tax, import duties tax and so forth. 

The Malaysian government intends to introduce the GST to replace the current sales and service tax. It is now a matter of time. As in other countries who have implemented the GST/VAT, tourists who come into our country will also enjoy the GST refund through Tourist Refund Scheme as they leave our country. 

But more importantly, this tax has been tested and proven to work well in modern economies such as Singapore, UK, Australia. The current Sales Tax and Service Tax which has been studied and deemed inefficient and ineffective in addressing key economic issues in the country, As such, this is a progressive step forward towards being a First World Nation. 

Soon, the country will be privileged to enjoy a more equitable tax that should bring a sigh of relief.

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