{"id":9947,"date":"2014-08-18T11:35:54","date_gmt":"2014-08-18T03:35:54","guid":{"rendered":"http:\/\/www.therocket.com.my\/en\/?p=9947"},"modified":"2014-08-18T12:47:34","modified_gmt":"2014-08-18T04:47:34","slug":"deputy-finance-minister-misleads-public-at-gst-seminar","status":"publish","type":"post","link":"https:\/\/www.therocket.com.my\/en\/deputy-finance-minister-misleads-public-at-gst-seminar\/","title":{"rendered":"Deputy Finance Minister misleads public at GST seminar"},"content":{"rendered":"

By Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to the Taiping MP<\/strong><\/p>\n

\"Zhemin\"<\/a>Chua Tee Yong either failed his accounting or lied when he said big companies will not want to do business with non-GST small businesses as they cant claim their input\/output tax<\/p>\n

According to a news report by The Malaysian Insider on 16 Aug 2014, Deputy Finance Minister Chua Tee Yong said the below during a GST\u00a0(Goods and Services Tax) seminar organised by the Secretariat For Empowerment of Indian Entrepreneurs under the Prime Minister’s department<\/p>\n

“Come April 1, 2015, which is the date for GST implementation, the big companies will not want to do business with the non-GST small businesses as they can’t claim their input\/output tax.<\/em><\/p>\n

“This will sooner or later cause these micro and small businesses to become less competitive in terms of pricing structure.”<\/p>\n

The above statement by Chua Tee Yong shows his complete ignorance of the GST implementation subject matter. This is outright unacceptable and an outrageous mistake for a Deputy Finance Minister and an accounting graduate like Chua Tee Yong to commit.<\/p>\n

Big companies will not stop buying from non-GST small businesses because they can\u2019t claim their input tax. When big companies buy from non-GST small businesses, there is no need to claim for input tax as no GST is levied on the goods sold.<\/p>\n

I will illustrate my point with two scenarios. The first scenario, where a company buys from a non-GST business and the second scenario, where a company buys from a GST registered business.<\/p>\n

When a company buys goods worth RM100 from a non-GST business, the company will have to pay RM100 to the non-GST business. No GST is charged as non-GST business is not allowed to issue tax invoice and collect GST. The cost to the company is RM100.<\/p>\n

When a company buys goods worth of RM100 from a GST registered business, the company will have to pay RM106 to the GST registered business. RM100 for the cost of the goods and RM6 for the 6% GST levied. The company is then allowed to claim the RM6 as its input tax. The cost to the company is still RM 100.<\/p>\n

In contrary to what Chua Tee Yong said, it would actually be more advantageous for big companies to buy from non-GST small businesses compare to their GST registered counterparts. Although the cost of purchase (from non-GST and GST registered business) is the same, companies can actually improve their cash flow if they buy from non-GST business as they need not pay upfront for the 6% GST and claim their input tax 3 months later.<\/p>\n

Non-GST business is also more competitive in terms of pricing when they sell to end consumers. This is due to the fact that non-GST businesses will not charge GST on the goods they sell to end consumers. This is as good as giving end consumers a 6% discount over their GST registered counterparts.<\/p>\n

Did Chua Tee Yong fail his accounting or intentionally lie when he made the above statement? I call on Chua Tee Yong to immediately retract his statement and apologise to the public as he has misled and confused the public and businesses on GST.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Chong Zhemin, DAP Perak Economic Development Bureau Chief and Political Secretary to the Taiping MP Chua Tee Yong …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[260],"tags":[],"class_list":["post-9947","post","type-post","status-publish","format-standard","hentry","category-current"],"_links":{"self":[{"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/posts\/9947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/comments?post=9947"}],"version-history":[{"count":2,"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/posts\/9947\/revisions"}],"predecessor-version":[{"id":9958,"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/posts\/9947\/revisions\/9958"}],"wp:attachment":[{"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/media?parent=9947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/categories?post=9947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.therocket.com.my\/en\/wp-json\/wp\/v2\/tags?post=9947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}