Overview GST in Malaysia

Tax is main sources of government to develop country and manage the benefit of the
public in country. Adam Smith in The Wealth of Nations (1776) wrote:"Such things as
defending the country and maintaining the institutions of good government are of general
benefit to the public. Thus, it is reasonable that the population as a whole should contribute
to the tax costs. It is also reasonable to demand certain other things of a tax system for
example, that the amounts of tax individuals pay should bear some relationship to their
abilities to pay. Good taxes meet four major criteria. They are (1) proportionate to incomes or
abilities to pay (2) certain rather than arbitrary (3) payable at times and in ways convenient to
the taxpayers and (4) cheap to administer and collect. There are two different taxes, which is
direct tax and indirect tax the example for indirect tax is Goods and Services Tax (GST).
In Malaysia, Prime Minister Dato Najib Abdul Razak announced goods and Services
Tax (GST) in Budget 2014. The implementation date was on 1 April 2015 and the standard
GST rate was 6% on taxable supplies of goods and services in Malaysia except those
specifically exempted by RMCD. The purpose of the new rules of tax or GST is to replace
the old tax system that called as Sales and Services Tax (SST). The government seeking
new revenue to offset the deficit in budget and reduce in depend from other sources of
revenue such as Petronas. As, we know the oil price is weak and there are termination
employment in that company to increase a revenue and decrease the expense. However,
with the new implementation of tax GST the government had collected near 30 billion from
GST for year 2015.
Royal Malaysian Custom Department (RMCD) was a responsible government body
to explain how the mechanism GST works and manage all of the flow tax in GST. There are
guide in their website show how to register, why have to register and who, the guidance to
remit and claim GST. GST (Goods & Services Tax), which also known as VAT or the value
added tax in many countries is a multi-stage consumption tax on goods and services. GST is
levied on the supply of goods and services at each stages of the supply chain from the
supplier up to the retail stage of the distribution.
Even though GST is imposed at each level of the supply chain, the tax element does
not become part of the cost of the product because GST paid on the business inputs is
claimable. Hence, it does not matter how many stages where a particular good and service
goes through the supply chain because the input tax incurred at the previous stage is always
deducted by the businesses at the next in the supply chain. GST is a broad based

consumption tax covering all sectors of the economy i.e. all goods and services made in
Malaysia including imports except specific goods and services, which are categorized under
zero rated supply, exempt supply orders as determined by the Minister of Finance, and
published in the Gazette. The fundamental of GST is its self-policing features that allow the
businesses to claim their input tax credit by way of automatic deduction in their accounting
system. This eases the administrative procedures on the part of businesses and the
Government. Thus, the Government's delivery system will be further enhanced.

Goals for the Interview

Our goals for the interview is to know

The GST registered Person Background

Name:

Andrew David

Location:

Andrew's E-Store
No. 2, Jalan PJS 7/16A,
Bandar Sunway 46150
Petaling Jaya,
Selangor Darul Ehsan,
Malaysia.

Directors:

Andrew David

Operation:

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Information of Interviewee
Name: Richard Williams
Position: Accountant

The GST registered persons challenges in complying with GST

(Minimum 1 Page)

Your opinion about GST compliance (minimum 1 page)

Your opinion and experience about the interview (minimum 1 page)

Suggestion for future research (minimum 1 page)

References