Even before budget 2014 is read out, one of the most talked-about subject is the GST. What exactly is GST? Well, it simply stands for Goods and Services Tax. Is the GST good or bad for you? This depends on who you are and your life style. As for the government, it will rake in RM20 billion more each year once it is implemented. So, definitely it is good for the government. It will also be good for the people provided the money collected is used wisely and with integrity.
Indonesia introduced GST in 1985, Thailand in 1992, and Singapore in 1994. For Malaysia it is announced to be in April 2015. So, we are the laggard in this respect.
Do not be overly concerned with the GST as some may actually benefit from it. Accordingly to Tan Sri Dr Fong Chan Onn, the GST will replace the SST (Sales and Services Tax). Presently, the sales tax is 10% and the services tax is 6%. This means that when the GST comes in, the SST will be replaced and no longer applicable.
The purpose of the GST is to cast the tax net wider so that more people will pay taxes. Presently only about 1.7 million people pay income tax out of a population of 29 million.
Most welcome about the GST is that some 40 basic food necessities such as rice, flour, sugar, milk powder, edible oil, wheat and oat are to be listed as zero tax items. Essential services such as healthcare may also be classified as tax-exempted.
If you wish to benefit from the GST, one way is to dine out less, and prepared your own food more often. Other ways include buying only what you need and avoid wastage.