GST is just around the corner

By Mohd Nur Fadzly Basar

There are so many things that I have learned so far in life. Among those lessons, the most important thing that I could apply in my life is that I would get something in return for everything that I gave. I believe we have to reflect on everything that we would like to see from others. If we want love, then we give love. I we want respect, then begin with respecting others. If we don’t want to be cheated, then be honest and uphold integrity.

From economic perspective, we know that the government is genuinely keen to improve the well-being of the people. It is responsible to utilise the budget collected from taxpayers for the people who deserve to receive it. Without approval from the public to spend the taxpayer’s money, the government would lose its functionalities. Therefore, the rule is that people can only enjoy the best infrastructure if they are willing to give more to the government.

Rumours that the government would soon implement Goods and Services Tax (GST) is not new. It has been the subject of heated debates by Malaysians since 90’s and in the Budget 2014, the Minister of Finance declared the final decision for GST is to be implemented will be in April 2015. GST is not a new tax but it is kind of replacement tax for its predecessor, Sales and Services Tax (SST). The reason why the government is so eager to implement GST is that the method of collecting taxes is  much better than SST, with broader tax base which will diversify their sources of income.

How will GST affect me?

Believe it or not, GST would affect you as it will increase, decrease and not affect the price of certain goods and services. For the items previously charged with 6% of service tax, based on the certain calculation, there won’t be any increase in the price. Meanwhile, for the item charged with the 10% sales tax, you may end up paying less as the GST will charge only 6%. However, the sector on economy which was not covered under SST regime may now be under the coverage of GST as it is a broad based tax approach. Unless the goods are zero-rated (GST is applicable but at a 0% rate), it may cost you even more.

My major concern is the irresponsible businesses could anytime increase the price of goods and services just the fact that GST has been introduced like how they have been doing when the price of fuel hikes. Even worse, some of them illegally include GST in the receipt although they are not eligible under GST. Yet some of us are illiterate consumers who just don’t bother about it.

Even though Anti-Profiteering Act has been tabled in Parliament to enable enforcement against such practices, it won’t be effective enough if the consumers do not speak up their rights and the customs officer does not enforce the law. It is awful when the law is there to protect our interest, we reject to be protected by it. Just look at how many among us don’t even bother to read this newsletter?

Are we ready for GST?

Last month, when I stopped at a traffic light at Wangsa Maju, one of the advertising board caught my attention. The tagline is like this “BIAR KAMI RUGI, ANDA PUAS HATI, 6% GST KAMI BAYAR”. The question that came to my mind is how this company could become that creative in their advertising? They see the GST in their own dimension and it is definitely different with ours.

Whether we agree or not, the GST will take place this April. Let the government do its best on the implementation aspect of GST. As a consumer, have we equipped ourselves with all the information about GST? Stop whining and complaining, keep searching for the right information and make GST as an opportunity, not a threat.

I would like to urge people to spend wisely and to spend at the right time. Check and compare the prices, or wait for the items to have discounted price. At the end of the day, it is the consumers who will make the decision.

How will GST benefit me?

Not everyone will directly benefit from the implementation of GST as it will merely give effect more at the macro level. The ultimate goal of any tax is to reduce the income inequalities within the society. Hence, it is a kind of weird if people who pay more will benefit the most from GST. Indeed, the benefit from GST may take place in the long term period.

At the end of the day, the power to utilise the income from GST is in the government’s hand. The policy makers will decide whether to improve the public transportation, build new roads, new facilities in the rural area, cover the national debt or build new schools. The obvious concern is whether or not the government will spend the money wisely. We hope and we pray that these chosen people to rule the country will uphold the integrity, love the poor, and do the best for the nation that deserves better.

Perhaps, GST is the right vehicle to boost Malaysia to a better economic landscape.

Photo taken from egenz

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