Goods and Services Tax (GST)

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sakakimakio
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Goods and Services Tax (GST)

Post by sakakimakio »

I wonder how Goods and Services Tax (GST) affecting your daily life? When it was first implemented in Malaysia, replacing conventional Sales and Services Tax (SST), it wasn't been accepted and hardly found anyone welcomed it except the government bodies. The government guarantee that it will benefit the people and generate extra income to them. But all I see now, the prices of goods and almost anything soaring high just after few months of the implementation. Plus, with country currency drop to the new low, I can't imagine how the people in my country would be in next 5-10 years.
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fishmonk
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Re: Goods and Services Tax (GST)

Post by fishmonk »

As a fellow Malaysian, I would say that the GST introduction is way too drastic due to the rate of 6%. Many traders and businesses took this as an opportunity to initiate price changes leading to higher living costs.

Despite the GST changes, our income remain somewhat similar leading to poorer consumer purchases for families average with average household income and below. Additionally, the currency is pretty low. I expect we will see more migrations to other countries. The talent drain issue will worsen in the next few years.
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overcast
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Re: Goods and Services Tax (GST)

Post by overcast »

GST in many countries had affected the economy. Especially on the currency conversion market. Forex has shown that with GST the economy gets affected. Food and transport services gets affected and eventually it affects other services. I think implementation of GST has to be done in phases, doing this in one go may not be easier for countries to recover. Then again step-wise implementation is lot harder in case of GST.
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fishmonk
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Re: Goods and Services Tax (GST)

Post by fishmonk »

As overcast mentioned, introduction of GST is inevitable. However, I think the implementation can be accompanied by subsidies given by governments to make it less painful for the people. As I have mentioned, the impact goes through all industries. Yet, the private sector does not make adjustments to help the employed to cope with such changes. This leads to a reduction in consumers' ability to spend. I think larger cities are especially affected due to the consumer buying patterns experiencing changes.
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Haristar
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Re: Goods and Services Tax (GST)

Post by Haristar »

The Goods and Service Tax was implemented only this month in my country and already we are facing a lot of difficulties. The government promised this will replace all the other taxes and only this will be implemented but the prices of almost all the everyday commodities have hiked making it hard for normal people to buy it. This tax was not welcomed by my people except for the government bodies like you said. Still many of the vendors and local traders have not used to this tax system and still, there are lots of confusions going on. :|
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fishmonk
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Re: Goods and Services Tax (GST)

Post by fishmonk »

I am sure that the initial implementation will cause many types of issues no matter which country you are from.
SMEs and small traders will also be affected as they will need to get used to this system.
There's also the risk of penalties if the accounting process is not done properly.
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TheOtherSide
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Re: Goods and Services Tax (GST)

Post by TheOtherSide »

Goods and Services Tax is one of the many ways the government is funding and boosting it's economic growth. The money collected from the GST is used to improve the government spending and finances and to attract foreign investors, which would eventually provides jobs and opportunities to it's people. Laws regarding tax implementation is really hard to accept at times since the cost of living is affected very much. Prices of household commodities and transportation services becomes high and so is inflation. But stability will soon follow and everyone will benefit.
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fishmonk
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Re: Goods and Services Tax (GST)

Post by fishmonk »

I would say it varies from country to country. GST does not lead to stability. Having foreign investors does not necessarily lead to creating jobs for local people. Some of these jobs will most likely mean an influx of foreign workers.
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