Wisdom Wise

GST Vs SST

Ben Gan
Publish date: Sat, 26 Oct 2013, 08:52 AM
Ben Gan
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Even before budget 2014 is read out, one of the most talked-about subject is the GST. What exactly is GST? Well, it simply stands for Goods and Services Tax. Is the GST good or bad for you? This depends on who you are and your life style. As for the government, it will rake in RM20 billion more each year once it is implemented. So, definitely it is good for the government. It will also be good for the people provided the money collected is used wisely and with integrity.

Indonesia introduced GST in 1985, Thailand in 1992, and Singapore in 1994. For Malaysia it is announced to be in April 2015. So, we are the laggard in this respect.

Do not be overly concerned with the GST as some may actually benefit from it. Accordingly to Tan Sri Dr Fong Chan Onn, the GST will replace the SST (Sales and Services Tax). Presently, the sales tax is 10% and the services tax is 6%. This means that when the GST comes in,  the SST will be replaced and no longer applicable.

The purpose of the GST is to cast the tax net wider so that more people will pay taxes. Presently only about 1.7 million people pay income tax out of a population of 29 million. 

Most welcome about the GST is that some 40 basic food necessities such as rice, flour, sugar, milk powder, edible oil, wheat and oat are to be listed as zero tax items. Essential services such as healthcare may also be classified as tax-exempted.

If you wish to benefit from the GST, one way is to dine out less, and prepared your own food more often. Other ways include buying only what you need and avoid wastage. 






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Discussions
2 people like this. Showing 3 of 3 comments

Fortunebull

Ben Gan! Thank you for your simple article on GST! Hope all forumers here read first before commenting on GST! I am all for it! Those who condemn first most probable never understand GST in the first place!

2013-10-26 10:31

ooi1955

Thank you Ben Gan. Appreciate the above explanation, simple and to the point. Now I understand better what GST stands for and how to benefit from it.

2013-10-26 15:35

Stockwatch

On the property sector GST will impact on the developers come 1st April 2015.The raw materials or inputs bought by the developer cannot be claimed back as these inputs are "exempt supply " and not "zero - rated supply" meaning that the developers will have to bear these costs or pass on these costs to the house buyer.The net effect will be these residential properties will cost even more.It might even defeat the purpose of house ownership.

2013-10-26 19:39

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