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GST Tool to combat Underground economy

KUALA LUMPUR, March 31 (Bernama) — The introduction of the Goods and Services Tax (GST) from tomorrow is one of the ways to combat the existence of black market activities.[br]

Under the GST, only traders who have updated sales and purchase records are eligible to get various facilities such as claim input tax and apply for bank loans.

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If the traders have registered for the GST but still purchase from the black market, they are not only ineligible to claim any input tax but this also increase their business costs.

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Under GST transactions, all sales and purchases must be recorded and it is very important to keep invoices and receipts.

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In actual fact, GST assists the traders in improving their sale and purchase record system so as to be more efficient in line with good business practice.

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This will facilitate them in identifying the actual cost that has been invested and the actual profit made.

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The allegation that GST would reduce the rakyat’s purchasing power does not hold water as the majority of basic foodstuffs and critical services are not subjected to the new tax.

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The GST rate fixed at only six per cent to replace the Sales and Service Tax (SST), which overall is at 16 per cent, is low.

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Additionally, traders who have registered under the GST are eligible to claim back the input tax that have been paid.

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This will enable to them reduce the cost of doing business and rationalises the prices of goods and services in the market.

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Besides that, the government has increased the rate for 1Malaysia People’s Aid (BR1M) for households earning less than RM4,000 a month.

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The government has also given an income tax rebate of 1-3 per cent to the middle and high-income groups.

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Meanwhile, the GST introduction at six per cent is among the lowest in the world to ensure that it has minimal impact on the rakyat.

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The rate also takes into account the revenue collection under the SST as well as the assistance that need to be channelled to the rakyat.

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— BERNAMA

 

Source : http://www.bernama.com/bernama/v8/newsindex.php?id=1121873

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