Gst Malaysia

Question 1 (b) : Examine the taxation needs of the present times and discuss whether a system of tax on goods and services is now timely and appropriate for Malaysia, and whether the business community is ready to accept such transformation. Your discussion should to some extent be based on the survey conducted with relevant Malaysian business operators and entites.

There are many laws and regulations were enrolled to assist the execution of the effective policies on taxation. However, certain policies have not changed in order to make sure that the policies remain constant. Lately, the current issue on taxation was about the introduction of the Goods and Services Tax (GST).

GST is a consumption tax based on the value-added concept. GST is imposed on the value-added concept. GST is imposed on goods and services at every production and distribution stage in the supply chain including importation of goods and services. GST will replace the present consumption tax comprising the sales tax and the services tax (SST). The difference between GST and the present consumption tax is in term of its scope of charge which is more comprehensive, inclusive of the manufacturing and distribution stages as well as providing a tax credit claim for GST paid on business inputs. When compared with the present consumption tax system, the sales tax is imposed only at the manufacturing stage that is at the time when the goods are manufactured or when the goods are imported.

On the other hand, service tax is imposed on specific services at the time when the services are provided to the consumer. GST is a more comprehensive, effective, transparent, and business friendly tax system. GST can overcome the various weaknesses inherent in the present consumption tax system. The inherent weaknesses under the present tax system are the cascading tax, double tax and pyramiding tax, tax erosion and leakages through transfer pricing and other means. Besides that, GST is expected to...