Malaysia Goods And Services Tax (GST)
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Business.Com.My™ - Malaysia Goods And Services Tax (GST) Information

It Is All About Malaysia Goods and Services Tax (GST)

During the government reading of the Budget 2014, Malaysian Prime Minister Najib Razak announced a GST tax of 6% starting on April 1, 2015. This will replace the Sales and Services Tax.

The introduction of the Goods and Services Tax (GST) in the 2014 Budget and its implementation on April 1, 2015 are reasonable moves, as the GST implementation in 17 months time would enable businesses and companies to make the necessary preparations.

The GST has been discussed for a long time, the Goods and Services Tax Bill 2009 was tabled for its first reading at the Dewan Rakyat (the lower house of the Malaysian parliament) on 16 December 2009, and many engagements have been held. It was delayed amid mounting criticism.

The GST is a new tax structure replacing the sales and services tax and is not an additional tax, while its rate, at six per cent, is the lowest among Asean countries.

The tax incentives and lower taxes could compensate for the slight rise in prices of goods after the GST is implemented, while the reduction in corporate tax could attract more foreign companies to invest in Malaysia. A GST Monitoring Committee, will ensure a smooth and orderly implementation of the GST.

The implementation time for GST is right because of the low inflation in the country currently. The GST has been implemented in more than 160 countries including less developed nations, and Malaysia should not be left behind by not introducing the same mechanism. Broadening the tax base to one that is more sustainable combined with responsible spending is the way to go as the country moves towards developed nation status in the near future.

With less than 18 months to go before the GST goes live, corporates need to assess the impact on their existing business models and strategies. Corporates have to start preparations to ensure they are ready, in their systems and processes as well as a broader organisational readiness. Various assistance schemes and initiatives have also been introduced in tandem with the implementation of GST to allay the rakyat and businesses.

Moving forward, it is timely for businesses to educate themselves on GST to ensure a smooth implementation and transition to the GST system. The key message for businesses is to be prepared and ready when the time comes.

Please browse through this GST section of Businesss.Com.My™ for more information on Malaysia Goods and Services Tax (GST).





 


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