Critically evaluate the statement that Malaysian will benefit from a change from sales and services tax to GST.
Question: Critically evaluate the statement that Malaysian will benefit from a change from sales and services tax to GST.
Every country has their rules and specific law to maintain or increase country’s income. In Malaysia, government has projected the current SST to GST which means to regenerate tax collection. GST can define as multi-stage tax for goods and services on domestic consumption. It also can be known as value added tax which is a type of consumption based on the tax charged to all taxable supply of goods. Those goods and services tax are providing revenue to the government. The effectuation of GST will get rid of the weakness of current tax system in Malaysia.
In addition to this, SST are differs with GST. Sales tax is a single stage tax implemented at the import or manufacturing levels and it normally will take the 10% while the service tax is implemented on specified services and it known as taxable services. Service tax cannot be imposed on any service which is not included in the list of taxable service. Generally it will take as 6%. As the information showed, GST is charged at every supply chain on the industry. For example, GST calculation based on 6% and the first, manufacturer need to pay RM6 of GST when buy the materials at RM100. The RM 6 would be the total input tax which is claimable from Customs Department. After that, those materials process into good which is sold to the suppliers at RM 200 and charges a 6% GST of RM 12. The RM 12 would be the total output tax which payable to the Customs Department. Thus, RM 12 (output tax) minus RM 6 (input tax) equal RM 6 (Net GST)is payable to Customs Department. In supplier side, they pay RM 12 (input tax) of 6% based on RM 200 goods that was acquire from manufacturer. They sell the goods to consumer at RM 300. The supplier will collect RM 18 (output tax) of 6% based on RM 300 goods. Thus, RM 18(output tax) minus RM 12 (input tax) equal RM 6 (Net GST)is payable to Customs Department. And
Every country has their rules and specific law to maintain or increase country’s income. In Malaysia, government has projected the current SST to GST which means to regenerate tax collection. GST can define as multi-stage tax for goods and services on domestic consumption. It also can be known as value added tax which is a type of consumption based on the tax charged to all taxable supply of goods. Those goods and services tax are providing revenue to the government. The effectuation of GST will get rid of the weakness of current tax system in Malaysia.
In addition to this, SST are differs with GST. Sales tax is a single stage tax implemented at the import or manufacturing levels and it normally will take the 10% while the service tax is implemented on specified services and it known as taxable services. Service tax cannot be imposed on any service which is not included in the list of taxable service. Generally it will take as 6%. As the information showed, GST is charged at every supply chain on the industry. For example, GST calculation based on 6% and the first, manufacturer need to pay RM6 of GST when buy the materials at RM100. The RM 6 would be the total input tax which is claimable from Customs Department. After that, those materials process into good which is sold to the suppliers at RM 200 and charges a 6% GST of RM 12. The RM 12 would be the total output tax which payable to the Customs Department. Thus, RM 12 (output tax) minus RM 6 (input tax) equal RM 6 (Net GST)is payable to Customs Department. In supplier side, they pay RM 12 (input tax) of 6% based on RM 200 goods that was acquire from manufacturer. They sell the goods to consumer at RM 300. The supplier will collect RM 18 (output tax) of 6% based on RM 300 goods. Thus, RM 18(output tax) minus RM 12 (input tax) equal RM 6 (Net GST)is payable to Customs Department. And