Wednesday, December 30, 2009

GST For Dummies

This is the motive of the UMNO/BN Government.

Our Rakyat do not fully understand the implication of GST, until it is implemented and prices of goods spiraling upwards. By then it is too late.

A rich country like Singapore introduced GST at 3%.

A poor Malaysia wants to implement GST at 4%

GST is a multi-stage tax system.

Everything the sellers sold, from manufacturer, wholesaler to retailers, collect GST for the government. Unlike the current sales and service tax (SST) is a single-stage tax. Only one party along the supply chain collect the SST for the government. If the manufacturer collects the tax, the rest are not allowed to collect.

Just imagine every seller add GST when they sell.

For example: The current Sales Tax for Toilet soap is 10%. With GST, the manufacturer pays 4% to the government when he sells it to the Wholesaler, the Wholesaler pays the government another 4% when he sells to a Retailer; and when the Retailer sells it to the Consumer, he pays another 4% to the govt. The Consumer actually ends up paying more than 12% in cumulative GSTs for the same piece of soap or > 20% more in taxes. (10% vs 12%+++)

If the supply chain is longer than 3 stages, the consumer ends up paying 4% more for each addition stage. Eg Manufacturer to Agent (4%) to Wholesaler (4%) to Retailer (4%) to Consumer (4%).. Total 16% ++++ (vs 10%) or 60% more in taxes!!!!

If the GST is not stopped, the Rakyat will ended up paying very very very high prices for everything.

'When you have a government that can't cut down on financial wastage and curb corruption, the next best thing is to tax the rakyat and squeeze them further.'

Last Sunday, 13 December 2009, the Cabinet booked the entire Ballroom of Oriental Mandarin at KLCC for cabinet meeting. Isn't this a waste of Rakyat's money? Is our Putrajaya complex so run down and bad that it is not good enough for the minister to have a "talk shop" ?

It ended up that the DPM and Rais Yatim rejected the PM's proposal for 1 Malaysia. [What have I been saying all along?]

Taking a bunch of racist to a five-star hotel for nothing. What an absolute waste.

If you still not in the know, GST is not Goods & Service Tax but "Go Squeeze Them"!


  1. mate... GST doesnt work that way....

  2. You don't seem to have a bsaic understanding of how GST works for registered buisnesses.

    There's no way a 4% GST at stage 1 incurred by say, a manufacturer, will compound to > 12% to a consumer say in stage 3 in the chain.

    The basic GST paid by a GST registered manufacturer is not an expense; he merely incurs it and claims it back from the Govt. So, the 4% WILL NOT be passed on to the next stage to the consumer. For GTS registered businesses, GST incurred is not an expenses and so will not figure in their retail pricing.

    Plesae check with the C&E before you mislead others about GST with yoyr limited knowledge!!

    We are all of 1 race, the Human Race

  3. Thank you, Donplaypuks, for highlighting the workings of the GST. Point noted.