GST

WARRANTY government not to implement the goods and services tax (GST) so that the tax system was accepted by the people is an announcement very welcome because it is still new in the country and the people are still not have a comprehensive understanding about it.

However, for those who have visited foreign countries that have implemented tax ITU also known as VAT (value added tax), it was not an unfamiliar because the GST or VAT was to their advantage as a buyer when shopping in these countries.

This is because as tourists, they are exempted GST / VAT on goods purchased and can claim back goods GST / VAT from the customs office in the airports of the country concerned.

Implementation in many countries around the world that prove this tax system is better because it involves a more comprehensive taxation system of production of goods compared with the existing tax system, which only involves the final buyer.

GST / VAT was introduced in France in 1954 by Maurice Laure to change the system highly dependent on uncertain tax based on sales for balancing the income tax system is not very effective.

Now more than 140 countries around the world implement GST or VAT because it is a tax system that is among the largest or the second largest contributor to the national income because the tax is more comprehensive and not only apply to the final consumer goods.

Implementation of the tax system is found to be burdensome, as claimed by some parties and for example in Australia have implemented the GST in 2000, personal income tax rates, tax, banking, tax wholesalers federal and some oil tax decrease which in turn causes people not pay any additional taxes.

Although there are parties in the country claimed that the negative impact of the implementation of the GST as it said the real estate sector affected by the ruler GST after house prices rose by eight per cent, but the actual situation is the rise was due to increased demand from the real estate sector from 2002 to 2004.

In Australia, some goods and services are free of GST and the items were food, education, health, exports, charitable activities, child care and religious services.

Canada to introduce GST in 1991 to replace the manufacturers sales tax also do not charge GST on items such as groceries, rent housing, medical services and financial services.

In that country, exports are exempt and individuals with low incomes can get a rebate of GST involving individual tax relief.

While in New Zeland to introduce GST in 1986, all types of food products are subject to the same tax rate but it gives an exemption to certain types of activities such as residential rental rates, certain steel products, financial services and contributions.

According to the law of the country, the price of goods must be subject to GST, except the business that is based on customer-based wholesaler activities.

For the countries of the European Union, GST is known as' output VAT (output tax on the manufacturer) and 'input VAT' (tax paid by the company after receiving the items). Eligible companies can claim back tax payments from the government.

Based on the various methods of taxation GST or VAT implemented in more than 140 countries around the world, Malaysia has conducted in-depth study on the impact of its implementation to the people, and the company's financial position.

For the government, the implementation of around 4 per cent GST is expected to generate a turnover of RM1 billion next year the money can be used for various development projects for the benefit of the people.

For citizens, they can benefit immediately from the implementation of the GST to be able to enjoy lower prices for all kinds of goods, especially essential goods and food related.

For example, people only have to pay the GST four percent when dining at fast food restaurant versus a higher service tax is imposed now.

Business costs also decreased after the GST replaced the sales and services tax (SST) as the restaurant no longer have to pay sales tax on the purchase of tables, chairs and other facilities. Thus, the trader can offer a cheaper price savings result from the payment of taxes.

However, not all prices will decline after the GST was introduced and there are also certain items that will slightly increase or remain at the original price. On the matter, the government has promised to try to talk to supermarkets - hypermarkets so that they maintain the old prices if the price of goods had increased after the GST was introduced.

In conclusion, a broader tax base and imposed on one level through the introduction of GST would enable the government to manage and administer the system and it is also easy to understand the people than the current tax imposed at different rates for different goods and services.