Lower-, middle-income groups protected under GST
KUALA LUMPUR: The lower- and middle-income groups will not be overly-burdened by the Goods and Services Tax (GST) effective next month, since they will spend the bulk of their income on zero-rated and exempted items.
Those who believed that GST causes huge impact to the groups tend to ignore the fact that the GST is designed to be a progressive tax system, hence the long lists of exempted, zero-rated and relief supplies.
In the meantime, the GST will neither victimise small businesses nor favour big corporations.
It is because the GST, being an equitable tax system and with its self-policing features, will ensure compliance, while tax evasion will be checked by the mechanisms of GST.
Everybody is aware that GST registration by businesses with annual turnover of RM500,000 and more is on a voluntary basis.
However, the certification of sales recorded is done by The Royal Malaysian Customs in collaboration with Inland Revenue Board, Suruhanjaya Syarikat Malaysia, etc, to ensure that calculation for the annual turnover are not manipulated.
It's clear that there is no opportunity for corruption as multi-government agencies will be involved in the process.
There's a lot of negative hype around on the GST, but let's be clear that the GST is just a government policy to restructure the tax system for the long term, in good and bad times.
Of the 193 countries in the world, 169 have already implemented the GST.
There had not been any major widespread protests in those countries against GST.
The mainstream, generally, accepts the GST; only the minority on the fringes would oppose it.
Even with the change of government, none of those countries, except for Ghana, had ever repealed the GST.
In Ghana, the ruling New Patriotic Party repealed the GST in 1998 due to pressures from the opposition party, National Democratic Congress.
However, when National Democratic Congress took over the government in 2000 they reinstated the GST and raised the rate from 10 per cent to 12.5 per cent.