Pay less for phone bills, food and beverages.
Telephone bills, food and beverage may become cheaper but computers, properties and gym memberships could cost more with a Goods andServices Tax (GST).
Analysts say this is the expected impact of the GST, which the government plansto introduce in 2011 as it seeks to widen its revenue source.
As it is, only a tenth of all workers pay income tax while earnings from oil make up about 40 per cent of federal government revenue.
The GST will replace the current sales and service taxes. At four per cent, it would be lower than the current sales and service taxes of five to 10 per cent, although essential goods like cooking oil would be exempt from GST.
PricewaterhouseCoopers senior executive director Wan Heng Choon said however,several other things would be more expensive, among them computers and houses.
“The rich will have to pay higher tax as they consume more. The lower incomegroup will benefit from the GST."
As for businesses, companies with revenues of less than RM500,000 would not have to pay GST. Wan said the GST, which taxes money spent, would have a neutral effect on businesses, but this would also depend on whether the companies understood how the tax worked.
He said the GST would hurt companies that did not put into place processes that would allow them to claim the input tax on time and monitor cash- flow.
"GST is a credible tax. People should give the tax a chance and not dismiss it for the wrong reasons. Companies should understand the tax and implement it properly so no one loses out."
Wan said businesses could benefit from the GST, provided they had good control over their taxes.
"If they don't do that, then the tax will become embedded and businesses will pass it on to consumers. If companies do not claim properly, it would be their loss."
The Real Estate and Housing Developers' Association Malaysia (Rehda) expects developers to pass on cost increases to buyers to maintain their profits.
Datuk Richard Fong, a developer, said houses would cost more from 2011, but he did not expect a severe effect on property transactions as the market was improving.
"Whether the GST will affect sales and how it will impact the industry, we have to wait and see until it is introduced," said Fong, who is Glomac Bhd group executive vice-chairman.
Deloitte Malaysia country tax leader Ronnie Lim said companies should take action soon to ensure they were GST- compliant.
"Businesses have to start upgrading their systems now."
"We advise businesses to start early as resources, especially the personnel and information technology, will be stretched when it comes to the crunch."
"Australia introduced GST in 2000. As demand within a limited period outstripped supply, GST experts from Britain, South Africa, Canada and New Zealand were brought in to augment the supply. Imagine the costs involved in the Malaysian context."
GST implementation requires two main services experts, for which there are not many in Malaysia.
"There are also not enough experts to modify the software to cater to the new tax regime."
Second Finance Minister Datuk Seri Ahmad Husni Mohammad Hanadzlah said the implementation of GST was a means of placing the country's economy at a level that was at par with those of developed nations and in keeping with changing times.
It gave the government an advantage, particularly in enhancing income flow, which could then be used to implement projects for the benefit of the people, he told Bernama in Ipoh yesterday.
"Only three Southeast Asian countries do not practise this taxation system, and they are Malaysia, Brunei and Myanmar."
"We will join 143 other countries in implementing the GST," he said after a gathering at the Tambun parliamentary constituency mobile service centre here yesterday.
Ahmad Husni said the people were becoming more rational now and those groups who wanted the government to postpone or review the implementation should have a strong reason for it.
PricewaterhouseCoopers senior executive director Wan Heng Choon said however,several other things would be more expensive, among them computers and houses.
“The rich will have to pay higher tax as they consume more. The lower incomegroup will benefit from the GST."
As for businesses, companies with revenues of less than RM500,000 would not have to pay GST. Wan said the GST, which taxes money spent, would have a neutral effect on businesses, but this would also depend on whether the companies understood how the tax worked.
He said the GST would hurt companies that did not put into place processes that would allow them to claim the input tax on time and monitor cash- flow.
"GST is a credible tax. People should give the tax a chance and not dismiss it for the wrong reasons. Companies should understand the tax and implement it properly so no one loses out."
Wan said businesses could benefit from the GST, provided they had good control over their taxes.
"If they don't do that, then the tax will become embedded and businesses will pass it on to consumers. If companies do not claim properly, it would be their loss."
The Real Estate and Housing Developers' Association Malaysia (Rehda) expects developers to pass on cost increases to buyers to maintain their profits.
Datuk Richard Fong, a developer, said houses would cost more from 2011, but he did not expect a severe effect on property transactions as the market was improving.
"Whether the GST will affect sales and how it will impact the industry, we have to wait and see until it is introduced," said Fong, who is Glomac Bhd group executive vice-chairman.
Deloitte Malaysia country tax leader Ronnie Lim said companies should take action soon to ensure they were GST- compliant.
"Businesses have to start upgrading their systems now."
"We advise businesses to start early as resources, especially the personnel and information technology, will be stretched when it comes to the crunch."
"Australia introduced GST in 2000. As demand within a limited period outstripped supply, GST experts from Britain, South Africa, Canada and New Zealand were brought in to augment the supply. Imagine the costs involved in the Malaysian context."
GST implementation requires two main services experts, for which there are not many in Malaysia.
"There are also not enough experts to modify the software to cater to the new tax regime."
Second Finance Minister Datuk Seri Ahmad Husni Mohammad Hanadzlah said the implementation of GST was a means of placing the country's economy at a level that was at par with those of developed nations and in keeping with changing times.
It gave the government an advantage, particularly in enhancing income flow, which could then be used to implement projects for the benefit of the people, he told Bernama in Ipoh yesterday.
"Only three Southeast Asian countries do not practise this taxation system, and they are Malaysia, Brunei and Myanmar."
"We will join 143 other countries in implementing the GST," he said after a gathering at the Tambun parliamentary constituency mobile service centre here yesterday.
Ahmad Husni said the people were becoming more rational now and those groups who wanted the government to postpone or review the implementation should have a strong reason for it.
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