:: Malaysians and GST ::

The latest uproar on this side of the world is the implementation of Goods and Services Tax (GST) by the Malaysian government. The social media newsfeed has been flooded with complaints and pictures of receipts.

Personally, judging from my own Facebook newsfeed, a lot of people are still pretty confused about GST. A clear example would be in the case of Mydin and Al-Ikhsan retailers, who became gentlemen by "absorbing" the GST (in other words, not reflecting them to the consumers).

Receipts from Mydin USJ

The absorption of tax by Mydin does not literally mean that the GST is not charged. It simply means that the price of goods/services are "reverse-engineered" so that the price of goods stay the same, before and after the implementation of GST. Retailers, like Mydin and al-Ikhsan are previously imposed with the Sales and Services Tax (SST) and Import Duty Tax prior to the new tax implementation. This has been lumped in together with the price of goods/services but not stated in the receipt. With the new tax system, the retailers MUST produce receipts showing a brief GST calculation, together with their GST identification. The SST has been abolished and replaced with GST. 

Hence, considering this case where the public is assuming that Mydin has "cheated" consumers is ABSOLUTELY WRONG.

The selling price of goods stays the same. The difference is only that the final selling is deducted by a rate of 6%. That is what they meant by absorption. However, compared to old SST system, they have to show how the GST is charged to the consumers in the receipt.

Despite the negativity out there, I believe this new tax system is the way to move forward. Simply by charging 6% across the board, tax distribution is even-ed. The more you spend, the more tax you pay. It is rather fair to consider that if you are earning more and able to spend more than your peers, you should be taxed more. Your relief despite spending more will be from your personal income tax.

For the slightly "less generous" income group, who usually spends on everyday goods, are paying less tax or exempted from GST. Most everyday goods are zero-rated GST products. You can get more information from the link I shared below:

http://www.gstmalaysia.co/gst-zero-rated-exemption-supply-list/158/

Taxes are alien to most people, and surprisingly, that includes the personal income tax. Before we start complaining, put up a little bit of effort to read and understand the basic of taxes implemented in Malaysia. Hopefully by doing so, you would understand where I am coming from by stating that it is the way to move forward.

Cheers.

-a@-