GST REFORM

Presented by :
Lim Huei Sien ( 18 )
Tan Swea Chee ( 33 )

Goods and Services Tax

( GST ) :
A New Tax Reform in
Malaysia

Introduction of GST
Since 1st April 2015, GST has replaced the
Malaysias Sales Tax (10%) and Service Tax
(6%) (SST).
Sales and Service
Tax
( SST )
10% & 6%

Goods and
Services Tax
( GST )
6%

Weakness of Sales Tax

As of now, the GST rate is six per cent, and

there are currently more than 4,000 items that
are either being exempted or zero-rated. This
makes Malaysias GST model, compared with
other countries, unique. Even Prime Minister
Datuk Seri Najib Razak himself acknowledged
this when he affirmed that Malaysias GST
model is among the most complicated GST
structure in the world.

The year of implementation and

rate of GST / VAT
in various countries

Standard-rated
GST

CATEGORIE
S
OF
GST

Zero-rated GST

Exempt supplies

a) Standard-rated GST
Goods and services in this category include
household items, utensils, clothing and
accessories which will be charged a tax rate of
6% in every stage of the supply chain.
For the consumers, they can identify the
standard rated supplies by looking at the
receipt when making the purchase. Normally,
standard rated supplies GST labelled with an
S.

How GST is charged at each level of supply chain

standard rated supply :

b) Zero-rated GST
Goods and services in this category are basic
food items, unprocessed food items and most
education materials which will be charged at
0%. It means that GST is not charged to the
final consumer but businesses can claim back
on their input tax.
For the consumers, they can identify the zero
rated supplies by looking at the receipt when
making the purchase. Normally, zero rated
supplies GST labelled with a Z.

How GST works on a zero rated supply :

c) Exempt Supplies
Exempt supplies are supplies of goods or
services which are not subject to GST. The GST
paid on input by the businesses cannot be
claimed back as tax credit. Examples :
Transport services, highway, private health &
education.
For the consumers, they can identify the zero
rated supplies by looking at the receipt when
making the purchase. Normally, exempt rated
supplies GST labelled with a Z.

How GST works on an exempt supply :

There will be some burdens on people especially from lower income

group to pay that tax for goods and services. This is because GST will
be imposed based on consumption rather than earning or salary.

The group also

will suffer
because of
inflation that
exist after the
implementation
of GST without
increasing their
salary.

IMPACT
OF
GST

By GST, the
government can
increase the
revenue of the
country and can
use the revenue
for some projects
that may give
benefits to the
people.