KIQ FAMILY

OUTING MONTHLY
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FAMILY HOLIDAY

LOCATION : LEGEND CHERATING RESORT

Ready for GST?

Are you ready for the Goods and Services Tax (GST)? Much have been talked about the Goods and Services Tax (GST) and its implications for Malaysia. Even before its implementations, Malaysians of all walks of life are nervous and some have resorted to go on the streets to express their concerns. However, Malaysians have to face the reality as it is more apparent that the Government will not reverse its decisions to go ahead with its implementations on April 1, 2015. It is not surprising that many are not ready to go into the unknown effect of GST. Business owners are sceptical of their business performance as evident from other countries which have imposed GST showed that the initial stage of implementations did affect their revenues. Ordinary Malaysians especially the middle income group are also calculating their buying power and perhaps have already have a planned spending manner. What about the ordinary Malaysians of the lower income group? They are thought to be more affected by the spiralling effect of price increase by traders. So much of confusion especially among ordinary Malaysians regarding the new tax. GST is a new tax system to replace the current Sales and Service Tax (SST). It is a multi-stage tax on domestic consumption as well as on importation of goods and services except on services and goods which are specifically exempted from GST. From a simple look at the new GST which is now fixed at the rate of 6%, it seems that it is much lower compare to the present tax combine of Government tax and SST at 10% and 6% respectively. We must bear in mind that not all business entities are entitled to charge the new GST to their customers. Businesses with annual sales turnover of RM500,000.00 and above only are liable to be registered under GST thus entitle them to charge GST to their customers. However, businesses which are not liable to the mandatory registration may also request to be registered.

Business owners within the mandatory category or who wish to be registered should have completed the required registration by 31st December 2014. On the other hand, any business entity may request to cease registration for valid and satisfactory reasons. Every business which has been registered under GST must comply with provisions in the GST. Except otherwise directed by the Director General, as a general rule, every taxable person or business must account for tax and submit in a prescribed form not later than the last day of each month. Any contravention of this offending provisions as provided for in Section 41 of the GST Act, shall be punishable and upon conviction shall be liable to a fine of not exceeding RM50,000.00 or 3 years imprisonment or both. From a simple perspective above, it is not surprising there will be sizeable pressures for business at the initial stage of implementations to comply with the strict tax submission and payment. Businesses that provide credit may have to fork out their own fund to pay tax even before they get payment from their customers. Are businesses that rely on longer credit term ready to reduce their credit term? Perhaps Malaysians have a couple of months to reposition themselves to endure the big change.