Table of ContentsAn Overview of GST Malaysia 11.0 Introduction:22.0 What is GST?43.0 Why GST :94.0 GST Implementation115.0 The Impact of GOODS AND SERVICE TAX (GST on Individual)..............................................................146.0 The Impact of GOODS AND SERVICES TAX on Economies and Industries.197.0 Conclusion ...22References..

An Overview of GST MalaysiaGoods and Services Tax (Malaysia)From Wikipedia, the free encyclopedia

Sources from Wikipedia saying that Gst is : A goods and services tax in Malaysia (GST), a value added tax, was scheduled to be implemented by the government during the third quarter of 2011, but has not yet been implemented. The government is still studying the possible impact of the tax and has not yet decided when it might come into effect. 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 four-percent tax will replace a sales-and-service tax of between five and ten percent. 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 Shaani 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. Shaani 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. Maamor 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, Protest (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 six percent starting on April 1, 2015. This will replace the Sales and Services Tax.1.0 Introduction:BRIEF HISTORY OF GOODS & SERVICES TAX (GST) MALAYSIA The idea of introducing a flat consumption based Goods and Services Tax (GST) in Malaysia has been floated since 1989. It now seems as though this may become a reality in the 2014 Budget, with implementation beginning within 18 to 24 months at an initial rate of 4 % on the supply chain. The plan to overhaul the tax system has begun to gain momentum as the government deals with an increasingly weak economic outlook, combined with global uncertainty.While not at the emergency levels of many advanced Western European economies, Malaysia has not run a structural budget surplus since the Asian Financial Crisis hit in 1997. Federal government debt as a percentage of Gross Domestic Product (GDP) currently sits at 55.4 %.1 For the time being, this is manageable, but it is the governments ability to reign this spending in, as well as lack of budgetary reform that has led ratings agency Fitch to downgrade Malaysias credit outlook to negative this year.The governments recent 20 sen cut to the fuel subsidy and increasing speculation of a GST framework to be included in the upcoming budget can be seen as evidence that they are trying to remedy both structural and cyclical economic challenges. Furthermore, for far too long there has been an overdependence on the revenue generated from oil and gas dividends, which currently account for over a third of total government revenues. A GST offers a single unified system where the tax burden is equally shared between the services and manufacturing industries, whilst simultaneously broadening the tax base. This will help to minimize tax exemptions as well as the compounding effects of pyramiding tax, tax erosion, transfer pricing and value shifting. In the current economic climate, it will also ensure a stability, as a GST is less susceptible to the fluctuations inherent in commodity markets.As evidenced in other countries that have introduced a GST or value-added tax (VAT) at varying rates, this system offers one of the most simplistic mechanisms available for calculating receipts that in turn will lead to greater compliance of the code. Issues surrounding the regressive nature of the GST and how it could disproportionately affect low-income households need to be addressed in its design so as not to put further financial stress on the 56 % of Malaysian households whose monthly income is RM3000 or less.3 The current inefficient system also needs to be restructured so as to give a greater level of transparency to the public, as well as reduce tax avoidance.The following policy paper gives a snapshot of the current tax system in Malaysia and analyses what effect a GST may have on the economy. It also shows how similar tax reforms have been realized in other countries and offers policy recommendations for the implementation process of such a reform.

2.0 WHAT IS GST MALAYSIA?Consumption Tax before GST a) SALES TAX Sales Tax was introduced on the 29th February 1972 as a single stage consumption tax, levied, charged and paid on goods manufactured in Malaysia and imported. Currently, the rates of sales tax are as follows:- Reduced rate of 5% for non-essential foodstuff and building materials A general rate of 10% Specific rates for petroleum products Licensing Manufacturers of taxable goods whose annual sales turnover exceed RM100,000 is required to be licensed under sales tax act. Those with annual sales turnover does not exceed RM100,000 are required to apply for a certificate of exemption from licensing. Scope of Tax Sales tax is levied on locally manufactured goods at the time the goods are sold or otherwise disposed of by the manufacturer. It is called a single stage tax because sales tax is to be charged once only, either at the input or at the output stage. List of goods subject to sales tax at 10% List of goods subject to sales tax at 5%

b) SERVICE TAX Service tax was introduced on the 1st March 1975 as a single stage consumption tax, levied, charged and paid on specific services provided by a taxable person in Malaysia. Currently, the rates of service tax are as follows:- Flat rate of 5%; Specific rates for credit card - RM50.00 (effective from 1st January 2010)

LicensingAny person who carries on business of providing taxable services in any prescribed establishment is required to be licensed under the service tax act. Licensing is based on the following threshold:Threshold LevelTaxable Services

No Thresholda. Hotel of having more than 25 rooms (Group A)b. Restaurant, Bar, Snack-Bar, Coffee Houses located in hotel having more than 25 rooms (Group B1)c. Night-Clubs, Dance Hall, Cabarets, Health Centre, Massage Parlours, Public Houses and Beer Houses (Group D)d. Provision of insurance services to business organisatione. Provision of telecommunication servicesf. Provision of services for the clearing of goods from customs controlg. Provision of accounting services by the Public Accountanth. Provision of legal services by the Legal Firmsi. Provision of engineering services by the Professional Engineersj. Provision of architecture services by the Architectk. Provision of surveying services by the surveyorl. Provision of Consultancy services by the Consultant Companiesm. Provision of management services by Management Companiesn. Provision of credit card or charge card services

Annual Sale Turnover of RM 150,000 and aboveServices provided by Professional under Group G as follows:-a. Provision of parking spaces for motor vehiclesb. Provision of courier delivery servicesc. Provision of motor vehicles service and repair centres by the Workshopd. Provision of security guard or body-guards services by the Private Agencye. Provision of employment services by the Employment Agency

Annual Sale Turnover of RM300,000 and abovea. Restaurants, Bar, Snack-Bars, Coffee Houses located in the Hotel having 25 rooms and less (Group B2)b. Services provided by Private Clubs including golf clubs (Group E)c. Services provided by Private Hospitals (Group F)d. Services provided by operators of hire-an-drive or hire-car companies (Group G)e. Services provided by advertising agency (Group G)

Annual Sale Turnover of RM3,000,000 and above (effective from 1stJuly 2008)Restaurants, Bar, Snack-Bars, Coffee Houses located outside the Hotel including food courts (Group C)

Scope of TaxService tax is charged and levied on selected taxable services as prescribed in the Second Schedule of the Service Tax Regulations 1975. List of prescribed services subject to service tax at 5%How service tax works

Understanding GSTGST shall be levied and charged on the taxable supply of goods and services made in the course or furtherance of business in Malaysia by a taxable person. GST is also charged on the importation of goods and services.A taxable supply is a supply which is standard rated or zero rated. Exempt and out of scope supplies are not taxable supplies. GST is to be levied and charged on the value of the supply.GST can only be levied and charged if the business is registered under GST. A business is not liable to be registered if its annual turnover of taxable supplies does not reach the prescribed threshold. Therefore, such businesses cannot charge and collect GST on the supply of goods and services made to their customers. Nevertheless, businesses can apply to be registered voluntarily.Almost all countries collect income tax, which is a percentage of what you earn as an individual. Another way the government gets revenue is by collecting tax from business operations, like sales tax and duties on items that are bought or sold.We need to pay tax so that the government can operate. GST is one method of collecting taxes which works better than others.What is GST?A goods and services tax in Malaysia (GST), a value added tax, was scheduled to be implemented by the government during the third quarter of 2011, but has not yet been implemented. The government is still studying the possible impact of the tax and has not yet decided when it might come into effect. 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 four-percent tax will replace a sales-and-service tax of between five and ten percent.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 Shaani 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. Shaani 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. Maamor 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 six percent starting on April 1, 2015. This will replace the Sales and Services Tax.BackgroundGST is not newThe concept behind GST was invented by a French tax official in the 1950s. In some countries it is known as VAT, or Value-Added Tax. Today, more than 160 nations, including the European Union and Asian countries such as Sri Lanka, Singapore and China practice this form of taxation. Roughly 90 percent of the world's population live in countries with VAT or GST.Here are some of the tax rates of countries around the world who have implemented GST or VAT.

Malaysian Tax HistoryIn Malaysia, our tax system involves several different indirect taxes: Import dutyOn goods brought into the country Export dutyOn goods produced for sale outside the country Government Sales TaxOn a wide range of goods at the point of import or at the manufacturer's level, with four tax rates at 5%, 10%, 20% and 25% Service TaxOn services provided by restaurants, hotels, telecommunications services, professional services by architects, engineers, lawyers etc. Excise DutyOn luxury and 'sin' products such as automobiles, liquor, beer and tobacco productsThe proposed GST will replace the Government Sales Tax and the Service Tax.

3.0 Why GST :The Government's tax reform programmed to enhance the efficiency and effectiveness of the existing taxation system. GST is proven to be a better tax system as it is more effective , efficient, transparent and business friendly and could spur economic growth as well as increase competitiveness in the global market.

GST is capable of generating a more stable source of revenue to the nation because it is less susceptible to economic fluctuations. It is important to replace the existing SST in order to eliminate its inherent weaknesses such as cascading and compounding effects, transfer pricing and value shifting, no complete relief on goods exported, discourage vertical integration, administrative bureaucratic red tape, classification issues and etc.

Various benefits that GST can offer to Malaysian consumers and businesses are: Improved Standard of LivingThe revenue from GST could be used for development purposes for social infrastructure like health facilities and institutions, educational infrastructures and public facilities to further improve the standard of living. Lower Cost of Doing BusinessUnder the current system, some businesses pay multiple taxes and higher levels of tax-on-tax (cascading tax). With GST, businesses can benefit from recovering input tax, thus reducing cost of doing business. Nation-BuildingGST is a better and more efficient method of revenue collection for the government. More funds can be channeled into nation-building projects for progress towards achieving a high income nation. Fairness and EqualityWith the GST, taxes are levied fairly among all the businesses involved, whether they are in the manufacturing, wholesaling, retailing or service sectors. Enhanced Delivery SystemGST will be administrated in a fully computerized environment, therefore speeding up the delivery, especially for refund claims. This makes it faster, more efficient and reliable. Increase Global CompetitivenessPrices of Malaysian exports will become more competitive on the global stage as no GST is imposed on exported goods and services, while GST incurred on inputs can be recovered along the supplies chain. This will strengthen our export industry, helping the country progress even further. Enhanced ComplianceThe current SST has many inherent weaknesses making administration difficult. GST system has in-built mechanism to make the tax administration self-policing and therefore will enhance compliance. Reduces Red TapeUnder the present SST, businesses must apply for approval to get tax-free materials and also for special exemption for capital goods. Under GST, this system is abolished as businesses can offset the GST on inputs in their returns. Fair Pricing to ConsumersGST eliminates double taxation under SST. Consumers will pay fairer prices for most goods and services compared to SST. Greater TransparencyUnlike the present sales tax, consumers would benefit under GST as they will know exactly whether the goods they consume are subject to tax and the amount they pay for.4.0 GST IMPLEMENTATIONImplementation of Goods & Services Tax in Malaysia :The cloud over whether goods and services tax ("GST") will be introduced in Malaysia was finally lifted on 25 October 2013 after the Prime Minister of Malaysia announced the Budget 2014. The idea of introducing GST was first conceived in 2005, but GST's implementation had been deferred subsequently to facilitate public education and consultation. Although the draft GST Bill was read for the first time in Parliament in 2009, the Bill has not been passed into legislation and no clear timeline was set as to GST's implementation.

The uncertainty as to GST's implementation cast many doubts as to whether Malaysia will have a GST regime and if so, when the GST will be implemented. Many businesses were taking a wait-and-see approach before taking any steps to prepare for GST's implementation. The Budget 2014 announcement ended the speculation and the uncertainties relating to GST's implementation. It is announced that the GST will be implemented in Malaysia with effect from 1 April 2015 at the rate of 6% and will replace the current sales and service tax regime. As such, businesses will have approximately 17 months to prepare for the implementation of GST. Nevertheless, at the time of writing, the GST Bill remains in a draft form and is still subject to further amendments.Preparing For GST's Implementation :Businesses should take the necessary steps and pro-active measures to be GST ready. Some of the steps which will need to be undertaken include:a) Review of Commercial Contracts and TransactionsAll long-term commercial contracts and transactions should be reviewed and reconsidered for GST purposes. The review is important to determine the allocation of the GST burden and the treatment of contracts spanning the implementation of GST. Particular transitional provisions may be applicable to such transactions and contracts. Companies should also consider the impact of irrecoverable GST on their business.b) Review of Internal SuppliesCompanies should undertake a review of all their internal transactions such as the provision of employee benefits, since such supplies may attract GST. Careful planning of employee benefits may be required taking into account the GST implications.c) Updating of Accounting System / Recording SystemsAll accounting and recording systems should be updated to allow for the calculation of output tax and input tax claims. Businesses must be prepared to bear the compliance costs associated with the collection and remittance of GST to Customs.d) Training of EmployeesIt is important that employees and staff are prepared and well-equipped to implement GST in the business operations through trainings and awareness programs. Experience in many countries which have already implemented GST show that early preparation is crucial to ensure a smooth transition to GST. GST preparations should be undertaken as soon as possible so that companies are able to properly manage the implementation of GST.A proper guideline on how to get ready in GST implementation.

Step 1: Client meet our consultant to discuss their business needs.Step 2:Brief our client on how to complete a GST Business Review Questionnaires (BRQ). Introduction on GST Malaysia Guidelines on how to fill up the BRQ

Step 3:Consultant review the completed BRQ. Answer to client questions on how to fill in the BRQ Review the BRQ duly completed by clientStep 4:Our consultant produce the GST Business Review Report (BRR). Report is produced based on the information completed in BRQ Our consultant will present the BRR to the ManagementStep 5:We may organise a workshop for your finance team to understand the GST Business Review Report (BRR). Client may start the implementation thereafter.

Step 6:GST registration. Duration3 - 4 months* (estimated)* The duration may varies. It subject to the schedule allocated, engagement period, the response time and the time factor that may affect the whole process.

** This is a set of standardised GST implementation strategy. It is recommended for small and medium businesses with a simple business structure and very minimum business processes. We recommend businesses with a complicated business structure to contact us for alternate solutions. This implementation strategy is not applicable to group registration.5.0 GOODS AND SERVICE TAX (GST) IMPACT ON INDIVIDUALSometimes we hear about a thing, we are without thinking or trying to find the right information. We only hear and believe in what comes to us. GST is a tax that will be imposed by the government to the people. We have heard that the leader of the opposition, the government struck with the issue of GST and scream, rant and rave that they had importance on people. We only look for the bad side but we dont know the fact that there are many benefits in the implementation of GST. These is the among of the advantages of GST.ADVANTAGES1) Fair Prices People can feel the benefits of immediate implementation of the goods and services tax (GST) to enjoy cheaper prices for various types of goods.Chairman of the Tax Review Panel Ministry of Finance, Datuk Kamariah Hussain said, among the people only have to pay six per cent GST when dining at fast food restaurants over the service tax is higher now. Individual that run the business also can reduce their cost after GST to replace the sales and service tax ( SST ) because the restaurant no longer have to pay sales tax on the purchase of tables, chairs and other facilities. With the implementation of the GST, the dealer can offer a cheaper price to individual result from savings the payment of taxes. Production cost is lower because GST paid on input is claimable by businesses. The savings from the ITC should be passed on to the consumers in the form of lower prices. GST reduction also affects the Consumer Price Index (CPI) thereby lowering household spending. The categories that involve in price reduction is clothing and footwear (2.71%), communication (1.86%), Furnishing, Household Equipment and Maintenance (1.57%), Restaurants and Hotels (1.20%), Transportation (0.94%), Alcoholic beverages and tobacco (0.73%), Housing, water, electricity, gas and fuels (0.12%) Not all prices will drop after the GST was introduced and there are certain things that will experience an increase or remain at the original price. This proves that not all goods will get an effect from GST implementation. Government at the same time also will discuss and persuade hypermarkets in the country to maintain the old prices if the prices rise after the GST are introduced because there are retailers who buy in bulk from them for resale in other places. If the price is already high from them, of course the price will be higher when it comes to customer. Public amenities also will be exempted.2) GST is not due to price risesThe implementation of the goods and services tax (GST) at an estimated rate of six percent will not cause price rises on balance (offset) the elimination of the sales tax and service. Implementation of GST also would reduce the effective tax rate on individual. GST seeks to replace the sales and services tax (SST), will not burden the people for granted exemption on essential items such as agricultural products and basic food.3) Improved Standard of LivingImplementation of the goods and services tax (GST), will not burden the people, especially in rural areas.Minister of Rural and Regional Development Minister Datuk Seri Mohd Shafie said ,but the rate of six per cent is expected to be lower than the sales tax and service at this time. He also said that The cabinet has decided and is a measure that does not burden the people, because this measure has been detailed several times. GST is proposed to replace the current sales tax and service available, not to burden the people. The revenue from GST also could be used for development purposes for social infrastructure like health facilities and institutions, educational infrastructures and public facilities to further improve the standard of living.4) Greater TransparencyThe implementation of the goods and services tax (GST) will be expected only around six per cent compared to sales and service taxes (SST) between five to 10 per cent over the years.Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said, GST exemptions on essential goods such as agricultural products and basic food to ensure that it does not burden the people, especially the poor and low income while avoiding inflation. GST provides a win-win situation for the people and the government, GST tax exemption will take effect on products such as rice and vegetables, and foods such as rice, sugar, flour, cooking oil, fish, meat and poultry. GST only applies to luxury goods or services that can be purchased by high-income consumers. GST eliminates double taxation under SST. Consumers will pay fairer prices for most goods and services compared to SSST. Unlike the present sales tax, consumers would benefit under GST as they will know exactly whether the goods they consume are subject to tax and the amount they pay for.DISADVANTAGESAlthough there are many benefits in GST implementation, there is also a disadvantage about it. These disadvantages arise when:1) Continue to want to be a party political issue. One party said you would do, a protest party said shouldnt do. It causes the quality of our discussion down to a very low level indeed. That either party or the party I right you are right, there is no middle way. Maybe in fact, there is a forgotten fact. This can be proving by current issues that happen in our country now which is on 1 Mei 2014. An anti-GST street demonstration was held at Dataran Merdeka, Kuala Lumpur by protest party.

2) The people still dont get what GST exactly mean. Most people in the country prefer to hear rumors without selecting which ones are good and which bad. In this case, the education of the GST should be strengthened in line with its implementation. People need to be given clear information about the Goods and Services Tax (GST) to ensure they understand about the measures to be implemented and its impact on consumers. The Secretary-General and Chief Executive of Malaysian Consumer Associations (FOMCA), Datuk Paul Selvaraj said, consumer confusion about the GST cause some of them figured it was a new tax form is when it is done replace the sales and services tax (SST) time. People should be explained so that they really understand the implementation of goods and services tax (GST) will be implemented from 1 April 2015 to overcome the fear of the people in the face of the situation. Information sessions to be done because people in this country are still not clear about the GST.Liang Teck Meng (BN-Simpang Renggam) who said, in this case, government should take action, such as create a complete website for the public to make reference to the GST and use the various agencies to give an explanation.Much has been said about the pros and cons of GST. However, the decision of the government is to take into account the progressive view of the GST and government also do what should be done in the well-being of the people and ensure medium-and low-income groups is protected.6.0 THE IMPACT OF GOODS AND SERVICES TAX ON ECONOMICS AND INDUSTRIESEconomicsAdvantages : 1. Increased competitiveness of export market Goods and services produced in Malaysia will become more competitive and internationally competitive. That means all goods and commodities that are exported are not subject to GST (zero-rated) And all business input free from element of tax.2. Economics Growth Through Tourism Providing Tourist Refund scheme (Skim bayar balik pelancong) in all the exits at the international airports. Maintaining the tax-free status of the island of Labuan, Langkawi and Tioman as a designated area that is not subject to GST.3. Diversify Revenue Reducing dependence on petroleum revenue Reduce reliance on income tax revenue4. Tax Revenue Increased Broadening the tax base More effective and reduce leakages/leaking revenue (the tax collected at each stage) Productivity taxes will increase in line with GDP growth.Disadvantages :1. May result in inflation as general products prices may go up. Inflation occurs due to increase in prices will affect the economy of the country.

2. Economic readiness to accept the GST Replacing the old with the implementation of the GST tax may reduce the rate of tax paid goods, but it does not improve the economic welfare of the country.

3. Problem of choosing the right time for implementation of GST The basic thing that needs to be resolved first, including the preparation of a planned system and reform attitudes in economic management.IndustriesAdvantages :1. The Cost Of Compliance The cost of compliance is expected to be insignificant because the lack of bureaucracy. In Malaysia, 40% of traders who will register under the GST was licensed under CPJ. GST is not a cost to the business because tax paid on business inputs can be claimed. The threshold more than RM500,000. Small businesses exempt from registration under the GST. An estimated 124,000 (22%) organizations will be registered under the GST.2. Business Cash Flow Not an issue because inputs can be claimed even if the payment of the purchase has not been made. The method of accounting based on the invoice and monthly taxable period. No matching between inputs and outputs make all proceeds may be recovered quickly and easily. Special schemes/cases under GST such as Warehousing, group registration, etc.

Disadvantages : 1. Maynotbe beneficial to register in some situations if your operation is very small (say, only a few transactions per year), then the administration costs may exceed the benefits of registration.2. Negative gearing Where negative gearing starts by a company the tax losses are trapped within the company. Therefore this often means that negative gearing should be structured outside the company.

3. Decrease the amount that shareholders received Tax preferred amounts received by a company will be subject to tax on distribution to shareholders. This inability to pass through tax preferred amounts to shareholders without causing further taxation stems from the way that the imputation system operates.

7.0 Conclusion :Recognition must be made of the need for the government to explore methods that increase future revenue sources. On the condition that the government does announce the GST, preparations for the implementation are crucial. The primary concern will be the impact upon low-income households in acknowledgment of the regressively inherent in a GST. The GST will put upward pressure on cost of living through inflation during the initial stages. Therefore, the government must address and strengthen the welfare state to protect those most vulnerable in society. One, all-encompassing way to provide assistance is through transfer payments in the form of vouchers and exemption targeting for goods which are deemed basic necessities.Through analyzing the implementation models in the advanced countries such as Singapore and Australia, we can see from their experiences and factor in constants in preparation for the GST implementation in Malaysia. As one of the few countries in the region that still do not have in place a broad consumption based tax system, Malaysia can refer to many countries around the world who do in preparing for a successful and smooth implementation. A common trait associated with an efficient GST system is improved international competitiveness. This is in line and a goal which Malaysia aims toward in becoming a high-income nation by 2020.Lastly and of utmost importance, if the government intends to expand the tax base and increase the efficiency of tax collection through the use of a GST, it will bring the majority of the population within the tax base. Therefore, all citizens become stakeholders in the budget and the government must begin to display strong political will to cut wastages, leakages and corruption. Prudent spending and transparent accounting will go a long way in winning over public acceptance of the GST.0