EXPERIENCE IS THE TEACHER OF ALL THINGS
-Julius Ceaser

Wednesday, December 28, 2011

GST- What Is It?

This is am email I receive and would love to share with all my readers especially rakyat of Malaysia
Go, Squeeze Them (GST). 

The Rakyat do not fully understand the implication of GST, until it is implemented and prices of goods go spiralling upwards. By them it is too late. 

A rich country like Singapore introduced GST at 3% but a poor country like us is going to put it at 4%. 

GST is a multi-stage tax system. (Try to understand this!!!!)
Everything that the seller sells, 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 tax, the rest are not allowed to collect. 

Just Imagine every seller add GST when they sell. (Read on to understand this!!!!)

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 Whole-seller. The whole-seller 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 government. The consumer actually ends up paying more than 12% in cumulative GST for the same piece of soap or > 20% more in taxes. (10% vs 12% + + +)

1) Manufacturer to Whole-seller  - RM 1.00 + 4% (RM 0.04)  = RM 1.04
2) Whole-seller to Retailer           - RM 1.04 + 4% (RM 0.42)  = RM 1.082
3) Retailer to Consumer (idiots like me and you) 
                                                  - RM 1.082 + 4% (RM 0.043) = RM 1.125
You and I have to pay a total tax of 12..5% or RM 0.125 for every ringgit of the manufacturers price on this three tiers system.

If the supply chain is longer than 3 stages, the consumer ends up paying 4% more for each addition stage. Example: Manufacturer to Agent (4%) 0r 60% more in taxes !!!!
(The final price that we idiots have to pay is RM 1.17 equivalent to 17% tax  or RM 1.07 for every Ringgit of the manufacturers price) on this four tier system.

If the GST is not stopped, the Rakyat will end up paying very very high prices for everything. (That is why iy is call GO, SQUEEZE THEM)

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