Sunday, 13 December 2009

Answer to GST snippet and how it affects you

In the snippet, I asked this question…

“Apart from the govt, there is a group of people who is smiling in the sleep and quietly celebrating because GST is to be implemented. Who do you think this group of people is?”

Thank you for all your answers and kudos to ThomasChan for getting it right. The group of people that I am referring to is the elite bunch of people, the professional tax consultants from the professional firms. I know some of them, and they are really smiling in their sleep.

90% or more of companies in Malaysia; be it big, medium or small will need their service in the next few months. They will be rendering their professional advice in terms of initiation, preparation, implementation and setting up of processes to manage the compliance requirement and payment.

Another group of people who will benefit from the introduction of GST is the IT industry. There will be a lot of system enhancements, translates to a lot of business. But I think this group of people is not quite aware of it yet.

These people are going to make 10s or even 100s of millions in consultancy fees. Trust me when I say they are now smiling in their sleep. Of course, only the top partners will make the big bucks. Those slaves doing the ground work at the bottom will just earn knowledge and lots of sleepless nights.

But anyway, why did I say in the title and it will affect you? Do you think it will affect you?

When 10s or 100s of millions are going to be earned by these consultants, it also means that 10s and 100s of millions will be spent by companies in Malaysia. What does that tell you? Get the drift yet?

10s and 100s of millions being spent means there is additional cost to businesses in Malaysia. Huge additional cost! Now, what usually happens when companies or even small time traders incur additional cost? Think increase-in-price-of-petrol.

Yes… these 10s and 100s of millions of additional costs are going to be passed down to consumers, i.e. you, me, your uncle, your boyfriend, your girlfriend’s one night stand partner, your girlfriend’s one night stand partner’s dog’s mating partner’s owner, etc.

Some of you mentioned that retailers are going to benefit from GST. That is not true is GST is effectively implemented. They can merely pass the cost to the consumers without raking in more revenue and remit the collected GST to the govt due to enticing need to claim input tax recovery (I shall talk more about this later).

Anyway… prices are going to increase. And this is why I said that if you are only worrying about that additional % of GST that you need to pay, you are wrong. And let me assure you, these 10s and 100s millions of additional cost is not the end of it. There are more complicated issues in the GST that will affect you, me, your boyfriend; your girlfriend’s one night… well, I am sure you know what I mean…


1 year ago…
A new criterion

2 years ago…
Will this point hit you?

23 comments:

j_yenn said...

Many policies in the world had been made by normally upper middle class people to benefit themselves.

ThomasChan said...

Actually, i dont mind paying the increasing prices of G&S due to GST.

Well, senior partners of Accounting and IT firms would be earning heck of a lot, they will eventually still need to spend money right? I.e. buying cars, makan etc...pushing a certain percentage of the 10s and 100s millions back to the economy. Well, the percentage is a subjective one...lol..depending on how hardcore savers are they.


Theres only one freaking sad and angry thing about GST. I dont trust the govt. Theres no "clear" transperacy on how they spend our taxpayers money for the benefit of the Rakyat. Lots of HankyPanky things behind the scene.

Heck, im not even going to mentioned about how they have had apportioned taypayers money in most cases to benefit "a" class of race ONLY.

And now, the Gov wants to implement a system that will enhance their ability to collect taxes more efficiently than before.

Zewt...get ur application for PR ready as soon as u can man...I'm currently in a long process of getting mine now.

ThomasChan said...

Actually, i dont mind paying the increasing prices of G&S due to GST.

Well, senior partners of Accounting and IT firms would be earning heck of a lot, they will eventually still need to spend money right? I.e. buying cars, makan etc...pushing a certain percentage of the 10s and 100s millions back to the economy. Well, the percentage is a subjective one...lol..depending on how hardcore savers are they.


Theres only one freaking sad and angry thing about GST. I dont trust the govt. Theres no "clear" transperacy on how they spend our taxpayers money for the benefit of the Rakyat. Lots of HankyPanky things behind the scene.

Heck, im not even going to mentioned about how they have had apportioned taypayers money in most cases to benefit "a" class of race ONLY.

And now, the Gov wants to implement a system that will enhance their ability to collect taxes more efficiently than before.

Zewt...get ur application for PR ready as soon as u can man...I'm currently in a long process of getting mine now.

ThomasChan said...

Actually, i dont mind paying the increasing prices of G&S due to GST.

Well, senior partners of Accounting and IT firms would be earning heck of a lot, they will eventually still need to spend money right? I.e. buying cars, makan etc...pushing a certain percentage of the 10s and 100s millions back to the economy. Well, the percentage is a subjective one...lol..depending on how hardcore savers are they.


Theres only one freaking sad and angry thing about GST. I dont trust the govt. Theres no "clear" transperacy on how they spend our taxpayers money for the benefit of the Rakyat. Lots of HankyPanky things behind the scene.

Heck, im not even going to mentioned about how they have had apportioned taypayers money in most cases to benefit "a" class of race ONLY.

And now, the Gov wants to implement a system that will enhance their ability to collect taxes more efficiently than before.

Zewt...get ur application for PR ready as soon as u can man...I'm currently in a long process of getting mine now.

MKL said...

Great post, my mate. I always learn something new here.

Huei said...

wow wtf! hahahah the figures scares me >.<

SJ said...

well im gonna pay once im on myself

A smile from SJ =)

Pinknpurplelizard said...

tax consultants... Loathe them but need them and gotta love them. LOL

I never did think too much in that direction. I've a tax-evasion mind. Hahaha...

Let's see if Anti-Zewt comes about to grace u with his immature presence on this one.

missironic said...

Sigh! God bless Malaysia and its rakyat...

Terra Shield said...

*Groans*

jessie chen. said...

oh well what can i say..in this cut throat world, all i can say is plenty of competition helps bring the prices down.

somehow when i read your article, theres alot of negativity surrounding the whole issue of gst.

yes the one off cost will hit the businesses hard and they may choose to pass on cost, but the cost is in tandem to the size of the company.

not very convincing to raise your bowl of noodles by 50 cents bcos u got to implement gst u know.

myop101 said...

if it means getting rid of BN, why not? we already wasted 52 years...

Ai Shiang said...

Oh well, I mentioned that it is a constant revenue for CA firms. I got that right! Right on the money! Do I get a prize? Just kidding lah :o)

Oh no! Retailers do not benefit from GST at all. GST is collected for the government. And money collected to do what, we are out of control. So, the lesser the buying &/or selling transactions, the lesser GST the Government can collect.

By the way, does Malaysia have Fringe Benefit Taxes? I always thought that the entire world has GST, FBT, stamp duties for buying houses and cars and other levies. Apparently I was wrong about some of it.

It's amazing that I've not been doing these jobs for few years and yet I can still remember! haha.

Anonymous said...

@#$%^&* !...the income tax dept sent me a letter : " dengan sukacita , anda tidak layak membayar cukai ..."
@#$%^&*, damn , DAMN...my income is too little to be taxed...DAMN !!!

jam said...

Thanks for the enlightenment, mate! I never knew how serious this GST thingy can go!

eiling lim said...

I guess I better shop now or else go marry a tax consultant who owns the firm and not the slaves. thanks for reminding me!

pablopabla said...

Competition amongst the big firms started liao ;)

zewt said...

j_yenn - yup, we are part of a screwed up system.

ThomasChan - Well, no one trust the govt at the moment i think. but there are other compelling reasons why GST must be implemented... shall talk more about it. hope you're around to catch those posts.

MKL - cheers mate.

Huei - me too :)

SJ - yay! independence :)

zewt said...

Pinknpurplelizard - haha... GST is hard to evade. but then again, this is malaysia.

missironic - we need much blessings.

Terra Shields - sigh...

jessie chen - hello there. indeed, there are a lot of negativity. when it was first announced in singapore, there were also must resistence. in fact, the HK govt decided against it after political pressure. but malaysia, well, malaysians will just complain and will end up paying them anyway.

myop101 - looks like we might just waste more.

zewt said...

Ai Shiang - nope, no fringe benefit tax. the tax regime here is still very much infant and immature lah. we try to be ahead but well... we are just not capable. i am sure u know why.

anon @ 16/12 8.32am - hahaha... when GST is in place, everyone will pay tax.

jam - there're much more. shall talk more later :)

eiling lim - if you want me to introduce u to some, let me know.

pablopabla - i got in my hands 3 proposals from the usual suspects already... :)

Anonymous said...

Dear Author zewt.blogspot.com !
I think, you will find the correct decision.

autumn said...

haih.. not to mention the increase of thefts and burglary now that all will get taxed, rich or poor :(

zewt said...

anon @ 19/12 10.40am - hmm... huh?

autumn - well, gst is a sophisticated tax for a sophiscated country... ours...