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GST IN MALAYSIA
1. Challenges And Impact In Implementing
Good And Services Tax In Malaysia
โข PREPARED FOR:DR.MUSTAPA
โข PRESENTED BY: NUR NAJIHAH ABDUL RAHMAN
:โฆโฆโฆโฆโฆโฆโฆโฆ.
2. Outline of presentation
Background of the topic Significance of the topic
Challenges of implementing
GST in Malaysia
Discussion / synopsis on GST
from Malaysian Budget 2015
The issues and impact of GST:
3. Overview of GST
๏ฑ What is GST? ๏ฑ GST Supplies Model
๏ฑ Classification of Items
4. History of GST/VAT
๏ฑ Who earlier introduce
๏ฑ Countries that implemented
GST/VAT
5. Overview of GST :What is GST ? ?
Goods and services tax (GST) is
a form of tax levied on
spending will be implemented
on 1 April 2015
GST is tax on what is
spent and not on what
is earned.
GST(6%) is not a new tax-as
replacing the existing
of Sales Tax and Service
(10% & 6%
6. Overview: Classification of GST
Zero-Rated Items Exempt item
โข Agriculture products โ paddy & various fresh
vegetables
โข Beef, mutton, swine
โข Fish, salted fish, prawns, cuttlefish, crabs, oyster
etc.
โข Rice, sugar, table salt, plain flour, cooking oil
โข Selected poultry and eggs
โข Water for domestic use
โข First 200 units of electricity (domestic use) for
minimum 28 days
โข Exported goods and services
โข Selected services related to exports
โข Public transportation โ rail, bus,taxi (excludes
luxury/airport taxi)
โข Tolled highway or bridge
โข Land for residential, agriculture or general
use
โข Funeral-in-a-package
โข Private healthcare & education
โข Selected financial services
โข Childcare services
โข Selected accommodation (28 days or more)
8. Overview: GST Supplies Model
GST referred to โtaxableโ items and โexemptโ items
๏ผ โstandard-ratedโ(taxable supply), - category where
suppliers who are GST-registered will collect 6% GST from
customers
๏ผ zero-ratedโ supply(taxable supply)- which carries 0% -make
wholly zero-rated supplies, then it is likely that you will be
in a refund position with Customs.
๏ผ exemptโ supply - which does not attract of GST. you will be
not refund position with Customs.
10. โข 1-Manufacturer of Television produced LED Television and sell in a bulk to the
wholesaler.
โข 2- Wholesaler need to pay =RM1000+ 6% GST(RM60)= RM1160
โข 3-Wholeseller sold the TV to the retailer with the price RM2000 per unit. RM2000+
6%GST(RM120)=RMRM2120
โข 4-Retailer would sell the unit of television to the consumer with the price
RM4000.RM4000+ 6%GST(240) =RM2240
โข 5-Overall consumer paid RM4240.And the GST that need to pay is total RM240
13. Principle of GST
Multi Stage Tax
Businesses Bear
Compliance Burden
Broad-based Tax
Tax Neutral to
Business
14. History of GST/VAT
โข VAT was invented by the French in 1954
โข Goods and Services Tax also known as the
Value Added Tax (VAT) or Harmonized Sales Tax
(HST) was first introduce by a German
economist during the 18th century
โข In 1954, the tax was finally adopted by France.
Maurice Laurรฉ , Joint Director of the French Tax
Authority, was the first to introduce VAT on
April 10, 1954.
15. Countries Implemented
No. Region No. of Country
1 ASEAN 7
2 Asia 19
3 Europe 53
4 Oceania 7
5 Africa 44
6 South America 11
7 Caribbean, Central & North America 19
16. Asia :Singapore
Year GST Rate
1 Apr 1994 to 31 Dec 2002 3 %
1 Jan 2003 to 31 Dec 2003 4 %
1 Jan 2004 to 30 Jun 2007 5 %
1 Jul 2007 onwards 7 %
17. Singapore
โข Introduced a GST in April 1994, paired with a
reduction of direct and other indirect taxes
โข Restructuring of the tax system began with a GST
rate of 3 %
โข Today, Singaporeโs GST rate is 7 % - its last revision
was in 2007. The introduction of a GST in 1993 is
simultaneous with the various package offset
18. Europe Country: Australia
๏ GST known as output VAT(ouput tax to producer),and input
VAT (tax that paid by company after received the good
๏ Australia, the idea was first floated in 1975. Australia imposes
flat rate on goods and services and replaced a range of
existing taxes
๏ Lower income group also get the rebate from paid of the GST
19. Recommendation
๏ผGovernment should created more items under
zero rate supplies rather than exempt rate
supplies.
๏ผWhy not we just improved the earlier tax that we
had, (SST tax) rather than imposed new one?
๏ผMalaysia should provide continuous and many
more paying offset to lower income group like
practised in Singapore