GST - Najib's maiden budget take 2

[pywong]

Sunday, November 1, 2009
Najib's maiden budget take 2: GST

By Lee Wee Tak at 11:51 AM
According to his maiden budget speech, Najib mentioned that the study for Goods and Services Tax is in its final stage. GST has wide implications and I hope he can have consult the relevant stakeholders.

During Badawi’s administration, I attended a GST seminar organized by an Australian consultant and he mentioned that the people in the banking industry was not adequately consulted hence proposed GST implementation was in question. Banking industry itself has very different products from consumer market. The question was answered a few weeks after the seminar.

In a nut shell, GST works like this

Supplier A sold his products to supplier B for RM100 and assuming 3% GST applies, he will bill supplier B RM103.

Supplier B has a policy to earn 9% on his selling price hence the cost to consumers will be RM110 (RM10 margin on RM110 selling price gives you 9% margin) plus 3% GST i.e. RM3.30 will be added onto the bill, making it RM113.30.

Supplier A collects RM3 from B and pays to the IRB within a specific period, like 2 months from date of invoice while B would pay IRB RM3.30 and claim back RM3.00. The end result is IRB getting RM3.30, 3% on the ultimate selling price of RM110. Consumers pay the whole RM3.30.

The above is a very simple illustration. In real life, goods and services pass through many parties before arriving at hands of ultimate consumers. WANGSAMAJU (http://wangsamajuformalaysia.blogspot.com/2009/11/najibs-maiden-budget-take-2-gst.html)

[pywong]

I like Najib's choice of words - very gently. It will be inserted so gently that we won't feel it entering us.

Throughout the world, GST is introduced at a low level initially to avoid strong protests. Then they keep on going up and up! In Australia and the West, it's more than 10%. Singapore started with 3% and it's now 7%.

GST draws flak from parliamentarian

Nov 27, 09

The government's move to impose the Goods and Services Tax (GST) soon has come under attack from Parti Sosialis Malaysia (PSM), saying it will burden the poor as well as the middle class.

It said the government should not have gone ahead with the move for though it will not be a problem for the 6 percent rich in the country but will certainly be too much for the 70 percent poor and the rest.

"One would have thought that even the BN would have more sense than to announce a tax that will further burden the poor at this point in time when we are in the midst of the worst recession since the 1930s, when more than 50 percent of the people can't make ends meet, while the Gini coefficient (a measure of income inequality gap) is steadily deteriorating, signifying worsening inequality in income distribution," said PSM central committee member Dr D Jeyakumar.

Prime Minister Najib Abdul Razak said that he will table the proposal at the end of the current parliamentary session next month.

He was quoted by Bernama as saying that GST would be introduced "very gently".

He gave an assurance that the GST rate will not lead to inflation, suggesting that it may be less than the current sales and services rate of between five per cent and 10 per cent.

The bill will be debated in Parliament early next year and imposed starting 2011. Malaysiakini. Subscription required. (http://www.malaysiakini.com/news/118498)

[pywong]

A. Articles are now coming up to debunk Najib's bullshit. To meet revenue shortfall, try cutting down on government expenses. Civil service employment at 4.6% of the population is more than twice that of Thailand and Indonesia. This reduces our competitiveness. Apparently, current govt regulations make it impossible to sack a govt servant even if he has committed a crime. Until we get rid off this burden sucking our blood, we cannot secure our future.

Tuesday, November 24, 2009

GST bill: Where can the public give comments?

A bill relating to the proposed introduction of the goods and services tax (GST) will be tabled for first reading at the end of the current Dewan Rakyat sitting.

Najib is quoted as saying that, "This will allow the public to give their comments, engage them, and if we find it necessary to fine tune it, we'll do so".

He stressed that if the government decided to introduce the GST in Malaysia, it would do so "very gently".

"It's not going to be an abrupt introduction," Najib said, adding that if the GST materialised, the rate would not burden the poor or middle-class Malaysians.

"And, it would not lead to inflation," he added. ctchoolaw (http://ctchoolaw.blogspot.com/2009/11/gst-bill.html)

B. Whenever politicians tell you that they are doing it for our future, you can bet that it is done for their future.

Thursday, November 26, 2009

GST may be at 4%

No editorialising here. Thanks to bro Walla, here's the link (http://is.gd/545aH) to the GST Discussion Paper dated 18th July 2005 prepared by the Ministry of Finance. I'm just posting this report for the record:

The government plans to impose goods and services tax (GST) at 4%, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said Thursday.

"We are replacing the current sales and services tax, which is currently at 5% to 10%," he told reporters at the Culture, Ideas and Values Workshop organised by Foundation For the Future at Country Heights Resorts in Kajang.

He said the GST implementation was important for the country's future.
ctchoolaw (http://ctchoolaw.blogspot.com/2009/11/gst-may-be-at-4.html)

C. And from epolicy - GST for Dummies.

Saturday, November 28, 2009

Consumption Tax Or GST

de minimis stirred up some dust on GST with the help of walla; I here contribute a speck or two.

Q: What is the purpose of imposing a consumption tax?
A: To reduce consumption and to increase tax collection.

Q: Whose consumption will be reduced?
A: Those at the margin. epolicy (http://epolicy.blogspot.com/2009/11/consumption-tax-or-gst.html)

[pywong]

GST? Stop Pretending To Be A Developed Nation
Posted by Simon Templar On Wednesday, December 02, 2009

GST is a serious matter but the general Malaysians are not made aware of it. After all, tax is a complicated matter. And most will choose to ignore it although it affects the dough in our pockets. Taxes are just not our daily comic strip readings.


There is nothing wrong with GST. The government needs taxes to run the country. But the question is, is Malaysia ready for GST?


To debate on this question, we first need to understand what GST really is.


GST is nothing and should not be anything but an ALTERNATIVE TAX COLLECTION METHOD. Stop pretending to be a developed nation. (http://saltpepperandalittlekicap.blogspot.com/2009/12/gst-stop-pretending-to-be-developed.html)

[pywong]

What sort of asinine rubbish is this? Husni must really take us for idiots. He claims that paying GST will put us in the league of developed nations. And that he is confident that the money collected will be given back to the people.

Why would we want to let them take our money in the first place?

For every dollar UMNO takes, 90% disappears into someone's pocket.

Husni: GST will put us among developed nations

IPOH, Dec 19 – The implementation of the goods and services tax (GST) is a means of placing the country’s economy at a level that is at par with those of developed nations and in keeping with changing times, said Second Finance Minister, Datuk Seri Ahmad Husni Hanadzlah.

He said the GST implementation gave the government an advantage,particularly in enhancing income flow, which can then be used to implement projects for the benefit of the people.

“Only three countries in the South-East Asian region do not practice this taxation system, that is Malaysia, Brunei and Myanmar. Brunei does not have a taxation system and we will join 143 other countries in implementing the GST.

“We need to change to ensure we stay in the best grouping,” he told reporters after a gathering at the Tambun parliamentary constituency mobile service centre here today.

He said the people were becoming more rational now and the efforts of specific groups who want the government to postpone or review the implementation, must have a strong reason and basis.

Ahmad Husni said the GST system to be introduced by the government is at four per cent to replace the sales and service tax at between five and 10 per cent at present, to increase the effectiveness of the country’s revenue collection.

“We believe the collection from the GST will be given back to the people,” he said. – Bernama TheMalaysiaInsider.... (http://www.themalaysianinsider.com/index.php/business/47046-husni-gst-will-put-us-among-developed-nations)

[pywong]

Earlier this month, the controversial Goods & Services Tax (GST) was tabled in Parliament by 2nd Finance Minister Datuk Seri Ahmad Husni Hanadzlah, with the reassurance that "the rakyat will not be burdened under the GST".

We speak with Tony Pua, Member of Parliament for Petaling Jaya Utara to analyse what the implementation of the GST will mean for the Malaysian on the street. He also shares his thoughts on Prime Minister Datuk Seri Najib Razak's handling of public policies, and his 2010 hopes for Malaysia. Watch it here: http://bit.ly/5ZQVgI

Tony Pua is an MP for Petaling Jaya Utara under the Democratic Action Party (DAP). He is also the DAP National Publicity Secretary, and the investment liaison officer for the Penang Chief Minister based in the Klang Valley. Before joining politics full-time in 2007, he was the CEO and founder of a Malaysian IT company, publicly listed in Singapore.

Selamat Hari Natal, have a good break!

The Fairly Current gang

[pywong]

PUBLIC FORUM/FORUM RAKYAT

Tajuk: BANTAH GST

- CUKAI YANG MISKINKAN LAGI RAKYAT!

GST - THE TAX WHICH MAKE THE POOR POORER

Ahli Panel/Panelist:

* YB Tony Pua, MP for Petaling Jaya Utara, DAP National Publicity Secretary.
* G. Rajasekaran, Setiausaha Agong MTUC
* Dr. Subramaniam Pillay, Exco Member of Aliran, Associate Professor, Business School, University of Nottingham
* Dr. Jeyakumar, MP for Sungai Siput, CC Member, Parti Sosialis Malaysia

Tarikh : 20 Januari 2010 (Wednesday/Rabu)

Time : 8.30pm

Tempat : Bilik Auditorium , Selangor Chinese Assembly Hall, Jalan Maharaja Lela, Selangor

Cukai GST, yang akan diluluskan pada bulan Mac 2010 merupakan satu lagi langkah ‘mesra koperat’ kerajaan pro-kapitalis Najib Tun Razak, kononnya untuk meningkatkan pendapatan kerajaan. Cukai ini akan memiskinkan lagi 60% rakyat pendapatan rendah. Tidak adakah cara lain untuk meningkatkan pendapatan kerajaan, seperti menghentikan rasuah dan kebocoran wang rakyat? Tanpa peningkatan gaji, adakah kaum pekerja mampu menanggung satu lagi perbelanjaan?

The GST Tax is set to be passed in Mac 2010 is yet another Najib Razak Government's business friendly pro-capitalist venture, in the pretext of increasing the revenue of the Government. The Tax will further burden 60% of those from the lower income group.

Anda dijemput ke forum awam ini untuk mendapat tahu dengan lebih lanjut kesan GST terhadap rakyat Malaysia, dan untuk berbincang tindakan yang harus diambil.

You are invited to understand the impact of the GST and discuss what we can do about it.

Free Entrance

Inquiry/Pertanyaan : 019-5638464/0169008202

Dianjurkan :PSM HQ, 22A Jln Vivekananda, Brickfields, 50470 Kuala Lumpur

http://parti-sosialis.org

--
visit our website at
http://parti-sosialis.org

[ravenwood]

I've been reading a lot about expected food shortage at http://www.marketskeptics.com. Just wondering whether this is on the radar for anyone in Malaysia... And with this tax whether anybody think things could go real ugly.

[pywong]

The issue is can we trust UMNO. They have a well-deserved record of not keeping their promises, from the 1960 ISA (only for the Communist Party of Malaya, CPM, to the 1988 International Peace Agreement with the CPM.) 1st they get the law passed on 4% GST, then they keep on raising it unchecked in future. This pattern has been repeated often enough for us to tell now.

Water, electricity, basic food to be exempted from GST
By Lee Wei Lian

KUALA LUMPUR, Feb 11 — About 40 basic goods and services will not be subjected to the new goods and services tax (GST).

These include basic foodstuffs, residential accommodation, health services, public transportation and domestic consumption of water and electricity up to a certain limit, said Finance Minister II Datuk Seri Ahmad Husni Mohamad Hanadzlah at the national conference on GST here today. TheMalaysiaInsider.... (http://www.themalaysianinsider.com/index.php/business/52778-water-electricity-basic-food-to-be-exempted-from-gst)

[pywong]

Copyright 2010 New Straits Times Press (Malaysia) Berhad
All Rights Reserved

New Straits Times (Malaysia)

February 10, 2010 Wednesday

HEADLINE: Grace period for GST enforcement expected

BYLINE: Rupa Damodaran

MALAYSIAN businesses may get a short break from strict enforcement during the transition period when the Goods and Services Tax (GST) is implemented in 2011, tax experts said.

The grace period is normally given to help businesses adjust to the new tax. Both Australia and Singapore, for instance, gave an unofficial two-year period and KPMG tax experts expect the Malaysian government to do the same.

However, the time frame may not be that long for Malaysia because technology has made it easier for companies to deal with new tax changes.

KPMG Singapore executive director for indirect tax Lam Kok Shang said as different industries have different models, the challenge is to ensure the transitional measures are enough for everyone.

Singapore started GST at 3 per cent in 1994 and it has risen to 7 per cent in 2007. The number of GST-registered businesses more than doubled to 75,157 as at January 1.

All goods and services "made in Singapore" are subject to GST as well as all goods imported into the republic. Exceptions are for international services as well as the sale and lease of residential properties and most financial services.

The GST registration threshold is for businesses with an annual turnover of S$1 million (RM2.42 million).

He was speaking at a GST seminar organised by the KPMG Tax Services Sdn Bhd in Petaling Jaya to assist businesses map out their transition to GST. lexisnexis. (http://www6.lexisnexis.com/publisher/EndUser?Action=UserDisplayFullDocument&orgId=102343&topicId=136950010&docId=l:1124894367&Em=1&md5=1bdfb23b2bd2183d532fcf061394b42)

[pywong]

Pakatan bets on GST to muscle BN out
By Syed Jaymal Zahiid

SHAH ALAM, Feb 25 — An anti-goods and services tax (GST) forum held by Pakatan Rakyat (PR) here last night marked the coalition’s aim to use the issue to edge its rivals out come the next general election.

The forum was held to educate voters on the GST, something PR has been harping on ever since the Najib administration announced its plan to use the GST as a way to increase the efficiency of the country’s tax system.

At the forum, PR leaders argued that the implementation of a GST system to replenish the national coffers racked by a rising federal debt, believed to be more than RM300 billion, would burden voters especially the poor.

Their argument centres around three major points: the cost of its implementation given the government’s exorbitant debt, inability to regulate the complex system as evident in widespread corruption, and income stagnancy.

Penang Chief Minister Lim Guan Eng said with the old sales and services tax system, only some 1.5 million of the total of 12 million workers are taxed but its replacement with the GST will mean everyone, including poor workers, will be affected.

Selangor Mentri Besar Tan Sri Khalid Ibrahim argued that GST can only be implemented if the income gap is not as wide as that in Malaysia.

He also said that a GST is only viable if the tax rate was set at 15 to 20 per cent as in the case of other developed nations with GST bearing the cost of its implementation.

Finance Minister II Datuk Seri Husni Hanadzlah had said that the government plans to set the GST rate at 4 per cent, something Khalid said was not possible.

“So I expect them to increase it to that rate sooner or later,” said Khalid.

Another panellist, Kuala Selangor PAS MP Dr Dzulkefly Ahmad, said the government had also lied about the amount of taxpayer money needed to implement the GST, which was about RM22 million.

“The Australian government needed A$5 billion to implement the GST, given the extremely complex nature of the system, and that was 10 years ago,” said the PAS lawmaker.

He added that instead of implementing the GST, the government could find other ways to obtain revenue like stopping “financial leakages” which were causing billions in taxpayers’ money.

Petaling Jaya Utara DAP MP and one of the major critics of the GST, Tony Pua, agreed with the other panellists that the system can only be implemented if the country’s per capita income is high.

He also said that only businesses will profit from the GST and not voters.

He backed Dzulkefly’s views that there were alternative ways to increase the country’s revenue, for example, eradicating patronage economics.

“If BN keeps increasing prices and taxing people more and more, it won’t last. The GST will be the nail in BN’s coffin,” he said to loud applause.

The GST Bill is scheduled to be tabled for second reading at the March Parliament sitting It is expected to be voted through and the ruling coalition expects to fully implement the system by end-2011.

Husni said the planned GST will save businesses up to RM4 billion and add RM1 billion to the government’s tax collection in the first year of its implementation. TheMalaysiaInsider.... (http://www.themalaysianinsider.com/index.php/malaysia/54374-pakatan-bets-on-gst-to-muscle-bn-out)

[pywong]

The chicken blinked.

GST delay delights opposition, baffles analysts

KUALA LUMPUR, March 14 — Opposition parties are crowing victory with the delay in tabling the Goods and Services Tax (GST) Bill which analysts say is linked to the Najib Administration’s desire to win elections over balancing the budget. TheMalaysiaInsider.... (http://www.themalaysianinsider.com/index.php/malaysia/56158-gst-delay-delights-opposition-baffles-analysts-)

[pywong]

Deficit to swell to 7.9pc, says Kit Siang
By Lee Wei Lian

KUALA LUMPUR, April 6 — DAP’s Lim Kit Siang has demanded an explanation for the RM12 billion in supplementary expenditure which he says will swell the government’s budget deficit to 7.9 per cent for 2009 from the official estimate of 7.4 per cent.

He also said that the other Bill — another RM12 billion in supplementary expenditure, this one for 2010 — will cause the government to miss its target of lowering the budget deficit to 5.6 per cent of GDP this year.

“With these two sets of supplementary estimates, Malaysia’s budgeting has again gone awry with the budget deficit in 2009 shooting to as high as 7.9 per cent of GDP in 2009 and over 7% in 2010,” he said in Parliament today while debating the supplementary estimates.

“A full explanation for this fiscal indiscipline and even irresponsibility should be given, as this is proof of imprudent control of public expenditure amidst inefficient utilisation of the nation’s financial resources.”

A larger than expected budget deficit may derail the Najib administration’s efforts to introduce fiscal reforms. The budget deficit was earlier estimated to have hit a record high of 7.4 per cent last year and reach 5.6 per cent this year.

The Fitch ratings agency had cut Malaysia’s local currency ratings to “A” from “A-Plus” in June last year due to concerns over the country’s growing budget deficit and said that Malaysia needed structural reforms to improve its long-term growth prospects and strengthen its credit profile. http://i416.photobucket.com/albums/pp242/tindakmalaysia/financial%20education/BudgetDeficitfor2009.jpg

There are two sets of supplementary estimates being presented in parliament — the second supplementary estimates for 2009 totalling RM11.36 billion, of which RM8.98 billion is for operating expenditure and RM2.39 billion for development expenditure, and the first supplementary estimates for 2010 totalling RM12 billion for both operating and development expenditure.

In his speech, Lim took aim at RM32 million allocated in the 2009 Development Supplementary Estimates for the purchase of aircrafts for the police.

“Apart from allowing the Inspector-General of Police and top police officers to work in style (it) makes no contribution whatsoever in the campaign to fight crime to make the country safe to work and play by Malaysians, tourist and investors,” said Lim. “The RM34 million would be better spent in purchasing say some 68,000 bicycles or 6,800 Honda cubs for all the police stations in the country to increase police visibility with frequent police beats, which is the best and most effective way to combat crime to keep the people in the streets, public places and private homes free from crime and the fear of crime!”

According to figures provided by DAP, if the supplementary bills are passed, the total expenditure for 2009 will hit RM229.25 billion against revenue of RM176.2 billion leading to a shortfall of RM53.05 billion, or 7.87 per cent of GDP.

The total spend for 2010 will be 203.57 billion against revenue of RM148.8 billion, or a deficit of 7.12 per cent of GDP.