Gst Implementation in Malaysia

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Conclusion

The implementation of GST has no doubt but improve the government income. The revenue generated from the good and service tax could replace the consumption tax of 5 to 10 percent. Not only that, Malaysia government has introduce GST in a slow pace which provide exemption for certain business and benefit low and middle income group of people. Although there may be slight hiking in price of product but majority of the essential good will not be affected due to exemption of the government. As for the budgetary deficit issue arise from Malaysia, the gap will be slowly covered up with a more effective and efficient tax system. The GST system could even cover up the leakage from the consumption tax, and the transparency of the whole tax system would not only increase the confident of the Malaysian but also will attract more investor when they have clearer image of the whole tax system in Malaysia. On the other hand, the Fitch rating was not downgraded because the income of the country has been boost up and was not solely depending on petroleum anymore. Although the price of petrol drop to the bottom, Malaysia economy still able to survive with the new tax system and the economy sustainability has been improve greatly. As for the chain effect of the Fitch rating, more foreign investor has invested into the country with the strong indicator of stable economy. The increase of foreign investment eventually will improve the country income and the budgetary deficit gap will be able to close slowly. As for the Malaysian citizen which do not agree on the implementation, the effect of GST will not be able to show in a short period of time but in long term, Malaysian will be able to foresee the benefit. Education should be provided for educating the whole new tax system in the economy and also the syllabus for study should be adjusted accordingly as well. Although there are minority which affected by the implementation such as traditional business close down, high income group of people affected high tax paid due to purchase of luxury good, but the change is for the future of the country which sacrifice should be made to close up the gap of income, and eventually there will be less poverty issue will be arise from the country since the whole nation income has been increase from the tax system. (Rating, 2015) As for conclusion, I agree that the implementation of GST do help Malaysia to resolve the budgetary deficit issue.

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Reference

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