Thursday, September 13, 2007

Lulu, The Tax Payer, Could Also Have Told You That

The tax expert version
The year 2009 a realistic and dynamic time to implement the goods and service tax (GST) as people will be more prepared, says a tax expert.
“I am more inclined to say 2009 if you looking at our current economic situation. We need to give people sufficient time to get prepared, at least between 12 and 18 months,” PricewaterhouseCoopers’ tax services executive director Steve Chia said today.
The tax payer version
The year 2009 is a realistic to implement the goods and service tax (GST) as people will have voted the Barisan back into power.
“I am more inclined to say 2009 if you looking at our current political situation. BN needs to give the voters sufficient feel-good illusion to ensure a win in the current General Elections” blogosphere taxpayer Lulu Whatalulu said today.
Do you know that something like only 1.2million out of the 26million Malaysians pay taxes?
With the introduction of GST, ALL Malaysians will have the opportunity to pay taxes. To put it ala AirAsia, "Now everyone can pay."
Assuming that GST is charged at 5%,
Your clerk who earns about RM1,000 who used to earn too little to pay taxes will have to pay 5% tax on everything he buys.
Your daughter who is still schooling with have the opportunity to pay this 5% tax on everything she buys.
Your parents who spent all their lifes paying taxes will have to pay this 5% for everything they buy.

We dont know if GST will come with a 5% drop in income tax. Lulu, the tax payer, wouldnt bet on it, considering the looming end of petrol money and how well prepared we are to face it.
But Lulu does think that consumption will rise in Y2008 as there will be "panic buy" to stock up before GST is imposed.
On Lulu's shopping list - probably a new car.

8 comments:

Anonymous said...

That's 5% without overhead cost. Like oil price hike, a product need to be shipped, stored, utility charge, extra services charge. All these sum up will exceed 5% depending how long the chain is. And everybody need to pay for food, electric and water bill.

Anonymous said...

And how would we know if they will put the money in good use. PKFZ 4.6Billions, the 10K technical books, all sort of scandals. :(

moo_t

carboncopy said...

What happens to the "hidden sales tax" once GST is activated?

Let me give an example, there's "sales tax" when you import electronic display and LEDs. Its 10%. I know this for sure.

And of course it is passed down to the customer. So, with the activation of the GST, would that mean that the 5% tax over the [Cost of Product] + [Over head] + [10% "sales tax"] + [Profit margin]?

BobSam said...

GST is the devil's instrument. Economists love it, as everybody will pay. Supposedly enlarging the base.

Right now, only a handful pay their taxes, inclusive of self. Hence if GST is introduced, a larger number of people will pay.

In theory, with GST, income tax will have to be abolished or reduced substantially. But as u have said, chances are it wont or perhaps a mariginally lower amount.

Tough!

Anonymous said...

if everybody not willing to spend because of price hike, how is that going to generate economic growth ? ppl don want to eat outside because it's expensive, and hawker+restaurant will close shop, leads to unemployment rate increased.

i don't how to calculate price with gst, if i'm to sell a product, will it be simple ($ + overhead) x 1.05, or ($ + overhead x 1.05) x 1.05 since utility and delivery sure will charge the 5%, and when pass to customer, the final cost will be another 5% ?

Azmin said...

I want to start a bus company that organizes shopping trips to Thailand!

As far as I know, the government there does not buy RM400 screwdrivers.

Who wants to be passengers??

(PS All the drivers will be tested, but not by money-sucking eKesihatan)

zewt said...

all these bloodsuckers cant wait for GST to begin...

why?

becos they can then offer their 'professional service' and make tonnes from it...

in essence... no one in malaysia have sufficient GST experience to actually offer 'professional service'.

Anonymous said...

"becos they can then offer their 'professional service' and make tonnes from it..."

Yes, very bare-faced about it and no way they can disguise their own agenda involved.

As if the idea of the impending privatisation of Health Care and the insurance companies agenda wasn't threatening enough...we have here the VAT one, as well. Greed: "We haft plans for you all!"

Smart deals sorta where the vendors are the only smart ones and the consumers, all suckers.

~wits0~