Budget 2014: Pay less tax in Goods and Services Tax (GST)?It was announced by our Prime Minister that 300,000 individuals who are earning a monthly income of RM4,000 will no longer need to pay any income tax in 2015, following the implementation of GST in 2015.

Are you going to pay less tax after the introduction of Goods & Services Tax (GST) on 1 April 2015?

The answer is obviously NO! You will surely be paying more TAX when GST is imposed! 

Before GST

Let’s take an example, individuals with monthly income of RM3,000 do not need to pay any income tax. However, he may need to pay service tax for foods & drinks ordered & consumed at McDonalds or Starbuck, etc.

Amount spent on foods & drinks with Service tax = RM900 per month (RM30 x 30 days)

Service tax = RM54 (6% on RM900)

After GST

Individuals with monthly income of RM3,000 do not need to pay any income tax but now he has to pay for everything that subject to GST, assuming he continue eat & drink at McDonalds or Starbuck, etc and never eat foods & drinks at “Gerai makan”.

GST = RM3,000 x 6% =RM180.

Additional tax = RM126! (180-54)


Government is expecting additional income of RM30,000,000,000 (RM30 billion or 30,000 million) from the Malaysia people after the introduction of GST.

Government income = people’s tax.

Let’s guess, who will pay more tax?