Gst Lor

Government's efforts to introduce the Good and Service Tax (GST) or Value Added Tax (VAT) is one of the country's efforts to generate more systematic and effective manner. This concept was introduced by Dr. Wilhem von Siemens, a German industry in 1918. France is the first country to implement the GST in 1954. To date, 146 countries have implemented the GST.

In addition, all countries in Asean have implemented the GST except Malaysia, Brunei, and Myanmar. Interestingly, Indonesia and the Philippines earlier introduced the GST in the 80's, much earlier than Singapore in 1994. Introduction of the GST through good management will have a substantial impact on earnings through higher tax compliance rate. However, in the current context, the relevant GST to be implemented now? Answering this question, there are three statement of the problem must be examined.

First, the Malaysian economy and consumers are willing to accept the GST? Second, when the right time for the government to implement the GST? Third, does the GST will lead to rising prices and inflation: between perception and reality. All three of these problems should be refined in order to implement the GST as a whole, but a deep and detailed study should be done so that its implementation to achieve the intended objectives.

Referring to the first problem, there economies of Malaysia and the user is ready to receive the GST, Emran and Stiglitz (2005) suggests that replacing VAT for a broader tax likely to reduce rather than improve the welfare for developing countries like Malaysia have the informal sector great. They also argued that the main problem with the literature that supports the use of VAT in developing countries is that it ignores that these countries have large informal sector.

While the second problem touched on the timing for the government to implement the GST, the basics that have to be resolved include the provision of a system of planned and reform attitudes in the political and economic...