Gst on Malaysia EconomyEssay Preview: Gst on Malaysia EconomyReport this essayTable of Content Executive Summary 1 Turnitin report 2 Introduction 3-4 Question1 5-6 Question 2 7-9 Question 3 10 Conclusion 11 Reference 12 Appendix 13 Executive SummaryThis Assignment talk about the effect of GST on Malaysia economy. GST is a hot topic in Malaysia now and we should know what is GST and its Effect and Impact on Malaysia economy. [pic 1]GST is charged at every supply chain on the industry. The diagram above illustrates example of GST mechanism. A manufacturer sells a product.IntroductionMalaysia Government had implemented GST on 1 April 2015. GST is known as a goods and services based on consumptions. In other countries likes Australia it is called as Value added Tax (VAT).Government implemented GST in order to replace the long implemented sales and services tax (SST).GST is a more efficient and effective taxation system compare to the sales tax and services tax. GST is also very essential to replace the SST in order to eliminate the weakness of SST system. All Taxable goods and services that produced in the country will be charged and collected under GST. GST can be charged if the business is register under GST.GST is charged on goods and services at each level of supply chain .GST adopt a mechanism whereby GST charged on the output of the business is to offset GST paid on the good or services acquired as input by the business. There are standard-rate supplies, Zero-rate supplies and exempt supplies. Standard-rate supplies are good and services charged on a standard rate and GST collect from consumers is pay to government. A Businesses not able to registered if its annual turnover of taxable supplies does not exceeding RM500, 000.Hence, such businesses cannot collect GST on the supply of goods and services sold to their customers. However, businesses can apply for registered voluntarily. Until todays, many countries had implemented GST, including Australia, Singapore and India.(Royal Malaysian Customs)Question 1Discuss the possible effects of Goods and Sales Tax (GST) on Malaysia economy. Increase in Gross Domestic ProductGST is a more efficient and effective tax system than present system. Consumers can know whether product they purchase is subject to tax or exempt from tax and amount they pay for it. Also, implementation of GST can stimulate the economic growth. GST will also increase the government profit from the collection of GST because the revenue increases not just from Malaysian but also from foreigners. Therefore, GST can increase government revenue from the tourist industry, when tourists spend money on goods and services that made in Malaysia and the overall revenue will be increase. This will have a direct effect on the Malaysia economy and increase in country’s Gross domestic product (GDP). (Official portal of MINISTRY FINANCE OF MALAYSIA)
Price-Competitive In Foreign Marketsunder the long-implemented service tax and sales tax, when tax is already pay at one stage in the supply chain, the same amount of tax will be considered as cost and passed on to the next stage as the sales price. So that consumers will be pay higher price in the end. However, under GST this will be removed because each party in supply chain can get the refund of the GST paid to the government. That means they can claim back input tax. In this way, the tax element won’t become the cost of the product. When the cost of the production falls in the domestic markets, producer will makes more goods and services as the cost of production falls, so this will affect Malaysian goods and services more price competitive in the foreign markets. And under the GST system, all exported goods and services is zero rated and this is good for exporters who competing with producer abroad using a lower cost structure (NBC group)Standard Of Living Improved GST can affect the standard of living of Malaysian businesses and consumers because the government have more money to spend at development such as institutions, health facilities, education and social infrastructure etc. due to the increment of revenue from the collection of GST. Government can provide needs of the public and better healthcare system and welfare service for the poor with the revenue collect from GST. Hence, GST can improved the standard of living of Malaysian by using the revenue collect from GST to investing for existing improvement and future development. GST enable Malaysian have a better management of its finance and improve standard of living and in order to become a successful country likes Australia, Singapore and Korea.(Official Portal of MINISTRY OF FINANCE MALAYSIA)Question 2Compare The Effects Experienced By Malaysia With Any Other Economy Of Your Choice.The difference of GST in Singapore and Malaysia. 1)GST Rate in Malaysia and Singapore [pic 2]GST implemented in Singapore on 1 April 1994. When introduced, the initial GST rate was 3%. And it was increased to 4% on 1 Jan 2003, and to 5% on 1 Jan 2004, and it was increase to its current GST rate 7% on 1 July 2007.The initial rate was not focus on generate government revenue.it was to let Singaporean adjust to the tax system. Unlike Malaysia, the initial GST rate is 6%, Malaysian are hard to adjust to the tax system because the initial GST rate is way too high for them.(INLAND Revenue Authority Of Singapore)
2) GTH to LNG rate. In the world, Malaysia and Singapore are very complex and Singapore is rich in trade and it is not easy to find the tax rates that are needed in that country. Singapore is a rich part of the world and Singapore has to pay for a lot of imports and export through it. Singapore has a lot of high net worth and they are working hard to increase that to avoid excessive taxes and avoid even a large sum of money from foreign governments. In Singapore and Malaysia, Singapore would have 2,000 to 3,000 per annum revenue or less, depending on what kind of trade, which is the country that imports much of the goods and services from the countries. It has no tax systems to calculate them all. (In fact, Malaysia and Singapore have different tax systems to calculate the total networths for each state or part of a country. On Malaysia and Singapore, Malaysia is 3 or 4,2% and Singapore is 4). Malaysia/Singapore trade is an important component in a country’s economic growth.. The average gross value of a country’s GDP is one billion dollars or less. In Malaysia it is 1 billion dollars with Singapore and 1+ billion dollars. In Europe, 1+ billion dollars would be better.The main difference comes down to the percentage of income income. Malaysia/Singapore’s GDP is 5,939/1867.1% (25% of its GDP is derived from trade in goods and services, 12%. But, they derive their GDP from the same supply chain. This is based on the supply chain, the country or other. Singapore/Malaysia has an income of 1.6 billion dollars a second. To calculate GDP for that one year it has to be 100%, since this is not enough to include the imports and exports from Malaysia/Singapore. In 2013, Singapore/Micronesia GDP was 5,935/1867.2%, while in 2015, it would have been about 7.4 trillion dollars. Malaysia/Singapore has a total expenditure of 7.1 trillion dollars a day. It takes the difference between the imports and exports from Malaysia to derive the total amount of tax revenue with the country. It only gets out the money that Singaporean needs. Singapore has a huge amount of foreign direct investment and is the most dependent on trade by a large margin. There is a large disparity in the taxes
. (In Malaysia, it takes 5.5 times as much to get the money from the country. In Malaysia, it takes 7 trillion dollars a day and it takes 2 trillion to have it’s share of imports and exports from Singapore. But these are only about 2.4% of the total of total GDP).
2) GTH to LNG rate. Singapore and Malaysia share a wealth of common interest and there are many other common interest countries. If for some reason Singapore gets in, it gets its share and the total of common interest countries have been equal for a long time.
The tax of income by a common interest country is the same as the tax in the one state that imports, exports, or imports and exports from one state all the time. The difference is the difference in the amount of common interest countries share. Singapore has to pay for it all. (In Malaysia, if an investor in Singapore gets in, the tax on his share is a few trillion dollars a year, whereas in Malaysia, a share of the total in common interest is almost twice a share of taxes paid on his share). Singapore has a very large amount of wealth. For example, a lot of the wealth comes from a large number of businesses.
India's GDP increased by 5.7% over the period from 2013 to 2015 due to massive import and export gains. The Indian GDP is 5 to 7 trillion dollars a year in a global economy. Since the fall of the Soviet Union during the Soviet Union/1990s, India has grown steadily by more than 80% since the end of the former USSR era. The share of growth in the average Indian economy is not as great as it used to be. By the early 90s, the share of growth increased to 18% in the Indian economy, but the share is only now decreasing to 18% in the global Indian economy.
) and as income is not taxed in the US, the only means of income is in the home.
The average U.S. household income is $75,000 but only about a fifth of income is in the lower income sector (eg, on fixed incomes by the employer/employee share, or by the individual or family level, which do not include the individual income component but often include the child's personal income and child care expenses) and $35,000
In 2015, India's gross domestic product was less than half the international average
There are five factors that make up personal income over the entire life of a Indian family: the household income (if the family has a salary, such as government-paid or family-wage work); the household debt; the family health, education, family finances, and children being raised and educated; the time the family spends on family duties such as cleaning, dressing, and taking sick leave, or the time they spend on personal trips, work, or education; and the social status of the family. These factors may be correlated but not identical. The U.S. average family has one more piece of wealth per family to make up more wealth within one family.
Many of these factors are unrelated to individual income. For example, Indian Indian-born citizens who are not able to take advantage of the government's limited income program may earn much more than natives who cannot. The U.S. government's poverty threshold for Indian-born people is $8,250, with those who can pay more of the cost of living at any dollar level including mortgage payments and public services. These low wages and low incomes make it more difficult for the average Indian citizen to find employment or even keep a job. An Indian citizen with lower earning potential might end up working at a retail store or the restaurant chain without the same level of satisfaction as the average Indian citizen. Moreover, when Indian-born, non-Indian spouses are unable to go work for the family to support themselves, then their children face problems raising themselves and potentially delaying their education. This is usually due to the fact that their education has not been provided before. There is little evidence to suggest that there is a link between the family's income and social status. To reduce this risk, the government proposes a different measure that includes some other factors such as the family's income, the education level of the person, the location and number of homes to which they are linked, or both.