News & Articles GST - A Huge Leap Forward For Malaysia
GST - A Huge Leap Forward For Malaysia
2 Apr 2015
"SINGAPORE, April 2 (Bernama) -- Positive and negative views were reported in the media on the start of the Goods and Services (GST), which is a great leap forward for Malaysia.
At six per cent, dubbed the lowest percentage in the region, the GST kicked off yesterday replacing the country's current sales and services tax.
Also known as value-added tax in some countries, the GST is not a new concept of taxation as other countries including Singapore has implemented the tax years ahead.
With the GST, Malaysia is on par with 160 countries worldwide that had implemented the tax regime for years.
AMP Capital Investors' head of investment strategy/chief economist, Dr Shane Oliver, said moving to a GST with a single tax rate dramatically simplified the tax system.
""It removes the distortions in consumer and business decisions that flowed from having different tax rates and taxes apply to individual goods and services.
""GST is a more efficient way to raise government revenue. As such, it is a huge leap forward for Malaysia and should benefit its economy immensely in the years ahead,"" he told Bernama.
On issues raised of whether the GST would lead to higher inflation, he said, if the GST was just replacing various other taxes then it should not be inflationary.
""If it is raising more revenue which will be used to finance income tax cuts then any one-off boost to price levels will be offset by the impact of reduced income tax,"" he said.
He said the introduction of the GST in most countries was preceded by much debate and opposition, which faded to nothing about a year after its implementation as people realised it was actually a good move.
-- BERNAMA"
At six per cent, dubbed the lowest percentage in the region, the GST kicked off yesterday replacing the country's current sales and services tax.
Also known as value-added tax in some countries, the GST is not a new concept of taxation as other countries including Singapore has implemented the tax years ahead.
With the GST, Malaysia is on par with 160 countries worldwide that had implemented the tax regime for years.
AMP Capital Investors' head of investment strategy/chief economist, Dr Shane Oliver, said moving to a GST with a single tax rate dramatically simplified the tax system.
""It removes the distortions in consumer and business decisions that flowed from having different tax rates and taxes apply to individual goods and services.
""GST is a more efficient way to raise government revenue. As such, it is a huge leap forward for Malaysia and should benefit its economy immensely in the years ahead,"" he told Bernama.
On issues raised of whether the GST would lead to higher inflation, he said, if the GST was just replacing various other taxes then it should not be inflationary.
""If it is raising more revenue which will be used to finance income tax cuts then any one-off boost to price levels will be offset by the impact of reduced income tax,"" he said.
He said the introduction of the GST in most countries was preceded by much debate and opposition, which faded to nothing about a year after its implementation as people realised it was actually a good move.
-- BERNAMA"
Source: BERNAMA
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