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10 Tips You should know about GST Malaysia

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Implementation of GST is vital in order to achieve high income nation in line with Malaysia Vision 2020.

GST Malaysia
Source: gst-m blogspot

Goods and Services Tax will be implemented  in the year of 2015. Effective in the month of April. It is exactly one year ahead. What should you do in this period? As a normal civilian and most of us just wait and observe.

It is really hard for us to understand how tax work especially when we were not concentrating on business class if we had taken one in the past. But, GST is not a foreign topic. Singapore has implemented it almost 10 years ago. If we look upon Singapore tax system we would have some clues. It is important to know that every nation tax system is different.

The new rate of GST will stood at 6%. What is our current Government Sales Tax rate? there are four. 5%, 10%, 20% and 25%.

1. Many countries have implemented GST

160 countries have adopted GST tax system. GST is invented by French tax official in 1950. It also can be known as Value Added Tax(VAT). Singapore adopted on the year 1994, China on the year 1980, Indonesia on the year 1985.

2. How Government benefit from GST?

Some of the Goods and Services will be included to be taxed. The current tax system (SST) has it own exemption of tax. When GST implemented, the exemption is no longer valid. One of the most significant example, Electric tariff after 200 kWh will be taxed. (This is just assumption from the author)

Do you remember the government said they will earn $$ by broaden the tax ? Your electricity bill will be taxed if it exceed 200 kWh a month. (This statement is not proven until implementation of GST)

3. How Malaysian benefit?

The revenue of GST will have obvious and direct impact to the public it would be upgrading current public infrastructure and public facility. Overall, it improve the standard of living. When people get richer, they would demand a certain standard of living

Personal Income Tax and Corporate will be reduced when GST is in effect.

4. What are the exemption in GST?

  1. Public transportation : Bus fares, train fees.
  2. Essential items : flour, rice sugar, chicken

5. Why abolish current SST? 

Sales and Service Tax is simply a tax system of the past. The new GST we are implementing is actually a tax system implemented by many developed countries way before 20 years ago. Tax system that has proven to stand the test of time.

Besides, government is seeking additional revenue to offset it budget deficit and reduce it dependence on revenue of Petronas.

6. How GST affect business

I am not tax expert, but from many GST custom website, it would lower cost of doing business by benefit from recovering input tax.

7. GST affect current price of goods and services

There will be increase and decrease price of goods and services. Besides that, you might find some goods and services price is still the same. I cant provide you a good and proper example. However, I am guessing KFC, Pizza Hut, McDonald and Starbuck are not interested in raising the price.

Reduction of price can be seen due to abolish double taxing in Sales and Service Tax(SST)

8. What are the public perception towards GST?

It is true that most of the Malaysian will oppose implentation of GST. They were not teach on this subject in the school or college.

Most of the public view on GST is negative based on recent study. Despite that there have been few positive article written that lower and poor income group will get lesser impact.

It is believed some of the items that previously not taxed by SST would be taxed increasing financial burden.

9. What are the advantages/benefit of GST at a large picture ?

I am guessing that when tax is implemented by stages. Each party from manufacturer till retailers will require to pay tax. That also mean authorities will have full information on the movement of Goods and Services. As a result, That would reduce red tape and greater transparency.

10. How it impact non Malaysian?

Tourists and foreign students in the country can claim tax. On selected outlets and prescribed RM300 goods and services purchased in the same outlet. They must travel via air transportation. Other terms and conditions apply.

More information visit at or Government Custom on GST at GST CUSTOM