Malaysia: regulators pass new GST

Tuesday 16 September 2014 13:54 CET | News

The Malaysian regulators have given legal consent upon the Goods and Services Tax (GST) of 6% starting with April 2015.

The Royal Malaysian Customs Department will be the agency in charge of administering the GST. GST is defined as a multi-stage tax payable by all the intermediaries in the production and distribution chain, with the tax burden ultimately borne by the end consumer. GST is a much broader tax than a sales and service tax; it operates on a negative concept, and all goods and services are therefore subject to GST unless specifically exempted.

Businesses will have to yield an increased responsibility for ensuring compliance with GST and, hence, prepare themselves for the implementation of GST.

Among others, foreign businesses should take the following actions: review commercial contracts and internal supplies, update accounting systems retrain employees so that they can deal with GST and ensure a clear understanding of the relevant conditions for qualifying for a GST rebate.

The Malaysian government has admitted that the GST will result in a nominal increase in prices but does not expect consumers to be too affected since they are only required to pay tax on goods and services used.

The government is also warning businesses not to raise their prices in reaction to the GST because they prices could find themselves subject to the Price Control and Profiteering Act.

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Keywords: Malaysia, GST, tax, levy, goods, services, merchants, regulators, multi-stage, end consumer
Categories: Payments & Commerce
Countries: World
This article is part of category

Payments & Commerce