Lately, there has been a lot of hoo-hah on the proposed GST (Goods & Services Tax).
As usual, the “proposer” went ahead and made some big statements without explaining the facts.
And as usual, a few “opposers” almost as quickly went ballistic and began quoting some startling numbers that scared many; it scared the heck out of me at least!
Then, as always in Bolehland, appeared the “damage controllers” to do some cut and paste repair job that said a lot of things without really answering the questions that were thrown up in the first place! Surprise! Surprise!
Therefore, as usual, the man, woman and whoever else in the street, who was actually keen to find out what was really happening, had to probably do what I had to do to get a better picture of the unfolding drama – Google it!
And so, I found a few “nuggets” (positive and otherwise) that may or may not help whoever is reading this:
1. GST stands for Goods & Service Tax.
2. When and If the GST is finally imposed, the existing Sales & Service Tax will be abolished. Therefore you and I won’t be scr***d by double taxation as some have alluded to.
3. The GST is scheduled to come into effect in 2015 – (Why am I bothered now, in 2013? Good question, as usual, I have no answers. I am just a blogger, and a part-time one at that!).
4. The GST will bring in approximately a RM27 billion annual kitty to the governments coffers – according to Business Times today.
5. The GST will mean “better economic management”. At the moment, it seems there are too many leakages – erm…and I don’t think they include the US$291 billion illicit funds outflow from Malaysia as reported by the Global Finance Integrity Report.
6. The POOR may face difficulties once GST is imposed! (Now – this is a killer. Who are the poor? The poor poor in the remote areas, kampungs and inner cities or the poor who are poor even though they are not supposed to be poor? Who decides who is poor? Interestingly, those earning RM3000 and less are also in this category. And yet – we cannot even agree to a minimum wage of RM900!).
7. To offset the above really scary scenario, the government (or someone) will need to fork out cash handouts (yes, like the infamous BR1M RM500. Our neighbor Singapore, had to fork out S$2000 (approx. RM4940) per household for 10 years when they implemented the GST. Now, does this mean we are 10 years behind our highly developed friends…??)
8. In lieu of the above handouts scenario, the other option is to factor in a zero percent tax rate for basic food, and giving tax exemptions on housing, medical, insurance, transport and toll to ease the burden on the “lower” income group. (I’m assuming “lower” here means RM3000 p.m. and below).
9. Interestingly, or rather, worryingly, statistics show that Malaysia has a 12 million workforce. Unfortunately, only 1.7 million pay income tax! Either we are expert con-men (and women) or 91.7% employees are below the level of taxation income.
10. If and when GST is implemented, what are the rates going to be? Again, the figures given by the “authorities” are murky and decidedly unclear. Someone said nothing less than 7%. Another said 6%. Yet another one said anything less than 4% would be “meaningless”. For a comparison, Singapore, started at 3% before gradually raising it to the present 7% mark.
11. Finally, the GST is sort of a standard practice worldwide. Contrary to what some may believe, it is not an idea of the current government so they can grab more of your and my hard earned money . (Thank goodness for that, because it means properly managed, the GST could actually be a good thing. For me, the keyword here is – “properly managed” – because that’s where the problems and answers lie. But to do it right, we have to get rid of the incompetence that has haunted us in practically every field for the past 30 odd years. And that – is a tall order.)
12. All information above was gathered from these three sources, thanks to Google!
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