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?