GST

Why GST need to eliminate in Malaysia ?

Introduction of GST

Good Service Tax is the collection of tax paid (liabilities) from nations and paid back to LHDN Malaysia . The purpose of collection to help government to run those project infrastructure , research and developments, medical supplies and also the petrol subsidies on behalf of nations of governments. Therefore, government agency had chosen the selected Kastam to collect the GST Taxes as a earning income for the purpose resilence, prosperity and robustness for tax collection.

Why we need to eliminate GST ?

One of the reason that we need to eliminate GST is due to the individual is being assessed tax charged at the ended of the closing date as at 30 April annually.  As per B form, individual already is being imposed Tax charged for the annual salaries that he or she earned annually by using EA form at the dateline for collection tax charged individually.

Howevers, the introduction of GST is being assessed , collected and monitored at the immediate action. When every time we have taken the dinner, we bought the foods, we pumped petrol, all those business transaction would be imposed tax charged and then the individual entrepreneurs would compute the tax liabilities that  need to pay at the ended of the closing dateline monthly.

One of the reason that the entrepreneurs is imposed tax liabilities from stakeholders or suppliers and passed to the final consumers to help government to collect taxes.

As a result of consequences, the entrepreneurs is being assessed the tax liabilities and at the same time the final consumers also is being assessed the tax liabilities from entrepreneurs.  The transaction is seem  being evaluated and assessed and charged through out the first and second dimensions from the taxation charges, first , tax charged  is being assessed is in supplier passed the liabilities to entrepreneurs and final consumers. It looked like double charged.

Howevers, the tax collection is payable to LHDN when the goods and services is became reliasation when the goods and services is became full settlements from supplier only. Howevers, when the supplier passed the tax income collection to LHDN, at the sometimes, suppliers and final consumers would not help to settle the tax liabilities when fully settlements, therefore they still treated those tax expenses and tax liabilities under the deferred tax liabilities  accounts.

There was no matching concept in identifying and justifying the tax expenses and tax income collected.  But the income and expenses is only recorded is based on realization concept only. Ie (disposable assets and liabilities when assets and liabilities is transferable). When this concept is recognized, the product and services would undergo obselence, damages, seasonal changed variation due to change of consumer tastes and fashion.

 As a result, those value is being measured would not reflected the net present value that are required to be multiplying the rate of inflation of 10% for the settlements of products and services that haven’t been settled at the ended of the financial period.  This is because those unsold stocks or products that had been stored in the outlets for more than 1 year, It still sold at the same prices. Since the value is required to devalue the amount and measurement, in order to reflect the net realizable value if stocks had been stored in more than one year. As we can seen, those supermarkets is launching the promotion, it just to reflect the products as at net present value and fair value less cost to sell which is corresponding with the inflation rate of 10% if the value in year 1 is not same with value in year 2 and year 3.

 How about the Property Developers?

 As far as I concerned, the commercial housing project is required to impose tax liabilities, however the residential housing projects is not required to impose tax liabilities.

This can be argued that there is arising social inequality among the social categorization between commercial and residential housing project. First point we need to emphasis here is that when we build house and buy or sell house, we need to incurred stamp duties on the strata titles for the houses is being build no matters which categories of houses is build. And at the same times, we also need to assessed and evaluate for the CKHT or RPGT on the properties bought and sold.

If we still insist that all the houses is required to pay GST taxes, can I questioning that the houses is to be categorized as products or services?

This is because houses in IAS 16, it was categories as fixed assets which is not movable. Can I ask a favour of question from Dr. Chong Kwai Fatt houses is belonging which categories ? Fixed assets, product or services ????

Can I know asked all those supplier in delivering those materials like concrete, am I able to differentiate how many % of the concrete is required to be used in commercial and residential ? Complicated measurement and transactions.?

Property developer is using % of stages of completion, GST is based on realization concept, there arise conflict in matching these two standards?

How to match the cut-off point from completion and corresponding entries to realization concept ?

Different categorization of different industries :-