Will Goods & Services Tax (GST) affect everyone? Yes, GST will affect almost EVERYONE in Malaysia, including those staying in the rural area or in the kampung.
Everyone include adults, kids, companies & businesses (sole proprietor & partnership). Kids will find out their daddy is buying less toys next year.
We all know that GST is a consumption tax, and ultimately individual will be the one who pay the GST, for things that they bought. Those things are as follows:
- petrol & parking
- telephone bill
- broadband & mobile internet bill
- electricity bill (if you have air-cond installed at home)
- foods at restaurants
- ___________ (please fill in yourself for what you are going to buy)
Basically, there will be 2 groups of companies in GST Era:
- Group A: Companies sell things & charge 6% GST
- Group B: Companies sell things but DO NOT charge 6% GST
I guess you are happy to know at least some shops not charging you GST then.
That’s wrong perception!
Once you find out how it works then you will know in fact you are paying GST for EVERYTHING!
You must first know how those companies work in GST system.
Forget about Group A companies as they are charging you 6% GST anyway.
The companies in Group B are as follows:
- Their yearly sales not exceeded RM500,000 (means these are small companies)
- Private schools & colleges
- Childcare centre
- Public transports (train/LRT/MRT/Monorail/taxi/bus)
- Bank services
- others (toll operators/funeral/residential land & building)
Companies in Group B will pay GST for some expenses when they are running their business.
Problems are they can’t claim GST refund from Government, and worse still, they can’t charge you GST.
GST they paid has become their cost of business and NO companies will absorb those costs. They’ll have no choice but to increase their selling price to maintain their profit/margin!
Now Everyone Pays GST!
Look at how the accounts of those companies look like:
Note 1: It is acceptable in law to increase price as long as the increase in price are in tandem with the increase in cost of doing business!
Note 2: I am trying to use words as simple as possible to let everyone know what is GST. Hope you enjoy reading!