Objective GST

Tax is an economic instrument which is vital for a country earn revenues or earnings.
Goods and Services Tax (GST) aims to increase revenue, improve services and provide
quality infrastructure to the people and will bring the country up to the level of developed
countries. GST was introduced to replace the sales and services tax (SST) which involve
changes in the structure of the collection and distribution of taxes for ensuring that there is
tax evasion.

Tax in this quotation is spent by the government for the purpose of national security
and people's physical development and infrastructure such as roads, hospitals, schools, the
aim of developing economic, social goals such as health, education, welfare and more.
Therefore it should be understood that the tax revenue earned from the people through taxes
as individuals must pay to the government will be able to enjoy the benefit and in the back by
the people.

After that, among the responsibilities of government requires income from the tax is
to build the school as a place to educate children. In addition, the government also allocated
funds to provide basic infrastructure such as building roads connecting villages, towns and
cities in the surrounding area, and allows the trading activity took place between these areas.

The government is also responsible for building public facilities such as markets to
accommodate people to do business and carry out their economic activities. Local merchants
will profit when imported goods are taxed. This is because it will encourage consumers to
choose a cheaper domestic goods. This is an important trading strategies used by countries
around the world in maintaining the interest local people. Another objective of the GST is a
tax on goods such as alcohol, tobacco and gambling. The tax burden on these goods is to
ensure that unhealthy activities such as drinking, smoking and gambling will be regulated and
does not cause harm to the public. In addition, the tax imposed on these goods may also be
used towards the restoration activities, the environment and various campaigns to promote a
healthy lifestyle.

Based on the same objective, the government gave tax relief on the purchase of books
to inculcate reading a favorite pastime among the people. With the tax system, the
government is able to form a society and cultivate a healthy activities among the people.
 GST was introduced to improve and restructure the tax system at present to be more
effective, equitable, efficient and transparent. The government found the sales and services
tax has the disadvantage that :

• To avoid the hidden tax into the cost to the actual final price due to excessive
profiteering by wholesalers, retailers and traders.
• In order to avoid overlapping of the actual tax burden of consumers who are taxed
twice.
• To avoid the hidden service charge which is not declared by the dealer / retailer in
the receipts and bills to increase their profit margins.
• To avoid acts of a handful of manufacturers, wholesalers, retailers and traders who
try to avoid paying taxes by not declaring the source, flow and the amount of their
income.
• To prevent economic sabotage carried out by a handful of retailers and traders are
deliberately hoarding goods, reducing dosage, monopolize and manipulate the price of
goods.
Reference

http://beritaup2date.blogspot.my/2014/01/sebab-mengapa-sistem-cukai-gst-penting.html

http://gst.customs.gov.my/en/Pages/default.aspx