Apache Major Risk Essay

296 words - 2 pages

Goods and services tax (GST) is tax on what consumer spends on but not we earned on. On 30 march 2010, our prime minister introduce the New Economy Model (NEM) and says that wider tax base is a important part of reform for new economy, so GST is a key component in this reform of new economy. GST bills will impose to tax on goods and services but not to essentials item. Besides that to protect the small business the finance ministry ...view middle of the document...

Introduce of GST is to overcome the weakness of existing system. The system have a complicated procedure to claim the relief tax of the business. Therefore there are also have a negative effect to the consumer price. Introduce of GST is consider as a tax burden. The attraction of GST was the neutral tax can benefit our government without lowering the effectiveness or efficiency of the market system in allocating the capital , land , and labour. The features of GST were the tax is collected at every stages of the production process and the amount collected at each stage is based on the value added at that stage. Zero-rated supplier are subject to the exports of goods , international services , agriculture produce , essential foodstuff for examples : rice , sugar , table salt , plain flour and cooking oil , lifestock supplier and fish. Electricity and water of domestic user also will be zero-rated. Exempted suppliers are subject to following sector : financial services, private health and education, domestic transportation of passengers, sales lease of residential property and land for public use. The distributional effect of GST will make a very high tax burden to the lower income.

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