Goods and Services Tax (Malaysia)
The Goods and Services Tax (GST) is a value added tax in Malaysia. GST is levied on most transactions in the production process, but is refunded with exception of Blocked Input Tax, to all parties in the chain of production other than the final consumer.
The existing standard rate for GST effective from 1 April 2015 to is 6%.
GST was scheduled to be implemented by the government during the third quarter of 2011, but the implementation was delayed until 1 April 2015. Its purpose is to replace the sales and service tax which has been used in the country for several decades. The government is seeking additional revenue to offset its budget deficit and reduce its dependence on revenue from Petronas, Malaysia's state-owned oil company. The 6% tax will replace a sales-and-service tax of between 5–15%.
The Goods and Services Tax Bill 2009 was tabled for its first reading at the Dewan Rakyat (the lower house of the Malaysian parliament) on 16 December 2009. It was delayed amid mounting criticism. The government responded by asserting that the tax on oil income will not be sustainable in the future. National Consumer Complaints Centre head Muhammad Sha’ani Abdullah has said, “The government should create more awareness on what the GST is. The public cannot be blamed for their lack of understanding, and thus, their fears”. Sha’ani says that the GST will improve accounting, reduce tax fraud, and facilitate enforcement of the upcoming Anti-Profiteering Act. Muslim Consumer Association of Malaysia leader Datuk Dr. Ma’amor Osman said the GST could help end dishonest business practices, but expressed concern about how the tax would be applied to medical products and services. A group leading the campaign against the GST, Protes (which objects to the GST because of concerns about its effects on low-income Malaysians), cancelled a planned protest but has stated that they will continue to agitate against the legislation.
During the government reading of the 2014 budget, Malaysian Prime Minister Najib Razak announced a GST tax of 6% starting on 1 April 2015. This will replace the Sales and Services Tax. Implementing GST tax will be a part of the Government’s tax reform program to enhance the capability, effectiveness and transparency of tax administration and management. The GST was implemented on 1 April 2015.
Exemptions of GST
- Agricultural products – paddy, fresh or chilled vegetables, certain provisionally preserved vegetables
- Essential foodstuff – oils, salt, flour, etc.
- Livestocks and livestock supplies or poultry – live animals and unprocessed meat
- Fish – live, fresh, frozen and dried
- First 300 kwh of electricity for domestic use
- Water for domestic users
- Goods supplied to designated areas from Malaysia – Labuan, Langkawi & Tioman
- Exported goods
- Exported services – such as architecture services in connection with land outside Malaysia
- Selected services in Malaysia – such as pilotage, salvage or towage services
- International services – such as transport of passengers or goods from a place in Malaysia to a place outside Malaysia
- RON95 petrol, diesel and LPG
- Sale of Residential Property
- Services provided by Government which are not considered commercial services, such as permits, licences etc. Services considered commercial are TV advertisement, rental of equipments, rental of multifunction halls etc.
- Goods and Services Tax (India)
- Goods and Services Tax (Australia)
- Goods and Services Tax (Canada)
- Goods and Services Tax (New Zealand)
- Goods and Services Tax (Singapore)
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- "Parliament: GST Bill tabled for first reading (Update)". TheStar Online. 16 December 2009. Archived from the original on 21 June 2011. Retrieved 26 February 2010.
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- "Government defends GST delay, scoffs at PR’s victory claims". Malaysian Insider. 15 March 2010. Archived from the original on 22 March 2010. Retrieved 15 March 2010.
- Creating awareness on GST is needed, says NGOs, by Azreen Hani. The Malay Mail, 15 March 2010
- "Pakatan MPs give budget thumbs down, say it’s nothing new | Free Malaysia Today". freemalaysiatoday.com. Retrieved 11 January 2015.
- "DPM: GST will boost the economy | Free Malaysia Today". freemalaysiatoday.com. Retrieved 11 January 2015.
- "Malaysia to introduce GST at 6% from April 2015 - SE Asia - The Straits Times". straitstimes.com. Retrieved 11 January 2015.
- "Essential items, services to be exempted from Malaysia's GST - SE Asia - The Straits Times". straitstimes.com. Retrieved 11 January 2015.
- "Why Malaysia needs GST", Malaysia, 30 September 2014.
- "Malaysia Budget 2015: GST, tax breaks and higher payouts among highlights, AsiaOne Malaysia News". news.asiaone.com. Retrieved 11 January 2015.
- "RON95, diesel and sundry goods exempted from GST | Malaysia | Malay Mail Online". themalaymailonline.com. Retrieved 11 January 2015.
- What is Zero-Rated Supply in GST?
- Goods and Services Act 2014
- Chartered Tax Institute of Malaysia
- Goods & Services Tax at Royal Malaysian Customs Department
- Goods & Services Tax at Ministry of Finance, Malaysia
- Difference between Grade A (Advanced) and Grade B (Basic) GST Certified Vendor by Royal Malaysian Customs
- List of certified GST Vendor published by Royal Malaysian Customs
- Junior Chamber International Mines Collecting Post-GST Feedbacks