GST in Malaysia

Bismillahirrahmanirrahim.
My next post is about GST in our country. Do you understand what is GST? Let me tell you a little bit about GST in Malaysia.

Goods and services tax (GST) which is also known as Value added tax (VAT) in many countries is a multiple-stage consumption tax on goods and services. GST is levied on the supply of goods and services at each stages of the supply chain from the supplier up to the retail stage of the distribution. Even though GST is imposed at each level of the supply chain, the tax element does not become part of the cost of the product because GST paid on the business input s is claimable.

The comparision of GST rate in Malaysia with other countries

Seven month into GST era, the Goverment has forecasted the revenue from GST to be RM 27 billion, which equates to about RM 3 billion per month. The average GST returns submission rate is also well over 90% based on statistic released by the Royal Malaysia Custom (RMC).

Journey continues for GST compliance in Budget 2016

As announced by the Prime Minister during the recent tabling of the Budget 2016, the projected GST revenue for 2016 is RM 39 billion and this represents a healthy net increase  of RM 21 billion from RM 18 billion that was expected to be collected inder the previous sales and service tax regime.

However, the experience has not been as positive when it come to the GST refund process. The month of June 2015 marked the initiation of the GST refund process by the RMC and delay in the refunds were experience.

It has been proved that lack of GST knowledge and support give a burden for most finance functions to make the obligation of filing GST return on monthly basis. To remedy the situation, affected business should ensure that their GST reporting function is well-resourced; possessed relevant GST competencies; is guided by well-documented SOPs; and keeps abreast of updates to the GST legislation.

An effective GST reporting structure will provide peace of mind to the various stakeholders of the business and keep penalties at bay.