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Now back to the hot topic—GST. Yes, the Goods and Services Tax might be making a comeback in Malaysia, and here’s what it means for YOU.
What’s the Difference Between GST and SST? 🤔
GST (Goods and Services Tax) – Known worldwide as VAT (Value Added Tax). Over 175 countries use it because it’s transparent and fair.
SST (Sales and Services Tax) – Used in Malaysia and the U.S. It’s hidden in prices, so consumers don’t really know how much tax they’re paying.
When GST was first implemented in 2018, many small businesses struggled with the rebate system. They had to wait months to claim back taxes, which hurt their cash flow. In contrast, SST doesn’t give visible rebates, so it can hide costs but doesn’t create the same delays.
How GST Works – Simplified Example 💡
Manufacturer A sells a product to wholesaler B for RM100 + 10% GST = RM110.
B sells to retailer C for RM200 + 10% GST = RM220.
Consumer pays RM220, and B can claim back their RM10 GST from the government.
✅ Transparent, fair, and based on value added at each step.
The problem in 2018? The rebate system was too slow. Small businesses couldn’t recover their taxes in time, so they raised prices to cover the delay, and consumers ended up paying more.
Will GST Hurt Consumers?
Not necessarily. GST can actually be progressive:
If you have less income, you spend less, so you pay less GST.
Higher-income consumers buy more, so they pay more GST—fair, right?
Plus, essential items like rice and basic groceries can be zero-rated, meaning no GST. With modern technology, rebates can be processed faster, making the system smoother than it was in 2018.
Comparing With Other Countries 🌏
Singapore: GST at 9%, corporate tax 17%, individual max tax 24%
Malaysia: Current SST, corporate 24%, individual max 30%
GST helps capture the grey economy—businesses that deal mostly in cash and don’t report sales properly. With GST, even micro-businesses using apps or digital invoicing can be included, improving fairness.
So Why the Debate?
Some argue GST will increase prices for lower-income groups (B40), while others say it creates transparency and helps businesses operate more efficiently. The government can also use targeted assistance like subsidies to protect those most affected.
It’s a balancing act between economy, politics, and fairness. Whatever happens, Malaysians need to stay informed and understand how these policies affect their wallets.
💡 Quick Takeaway:
GST can work, but the rebate system must be fast and efficient, essentials must be protected, and technology should be leveraged for transparency. It’s not about hurting consumers—it’s about creating a fairer tax system for everyone.
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