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Malaysia still evaluating reintroduction of GST

Government still evaluating reintroduction of Goods and Services Tax to replace Sales and Services Tax

Malaysia is again facing calls to reintroduce a Goods and Services Tax to replace its turnover-based Sales and Services Taxes.  GST was first introduced in April 2015 to replace SST, but was withdrawn in September 2018 and SST reimplemented. Any GST reintroduction could happen by 2023.

Last week, the government confirmed “A study being carried out also covers the impact on the economy, cost of living, cost of goods, as well as ability to address the shadow economy (or black market),”

This follows recommendation from the Organisation for Economic Cooperation and Development (OECD) that GST would broaden and stabilise the tax base, and help the government cope with the economic shock of the COVID-19 crisis. It would also limit the cascading – compound taxation – effect on businesses of the current irrecoverable SST.

The country’s ongoing political uncertainty – the Prime Minister has just resigned following a lost vote of confidence – is however the main block to any change of tax policy. The country has faced a long-term outflow for foreign money as the COVID-19 pandemic and political indecision have delayed economic reforms.

How Malaysia fell out of love with GST the first time

SST applies to less than 100,000 companies, but GST covered almost half a million traders, giving a more reliable and larger tax base. However, final sale-only SST was felt to be simpler to administer than mult-stage GST. GST also failed to stop the rising government debt problem – a promise for its introduction. As a result, the new GST become unpopular and was blamed for rising prices following its 2015 introduction. This led to its withdrawal in 2015 following election commitments by Pakatan Harapan.

Future global VAT / GST changes

Date Country VAT / GST  changes (click for details)
1 May 2022 Ireland Cuts VAT on domestic fuel VAT until 31 Oct
1 May 2022 Serbia E-invoice introduction
1 May 2022 Belarus Raises VAT on electronic comms services to 26%
1 May 2022 Indonesia VAT on crypto-assets and services
1 May 2022 China Temporary VAT rate cut on delivery services
2 May 2022 Peru VAT on foods cut on inflation worries
5 May 2022 EU Closing VAT in Digital Age consulation
1 Jun 2022 Belarus VAT on non-residents B2C sellers of goods
1 Jun 2022 Belgium Ends domestic electricity VAT rate cut
24 Jun 2022 Moldova Hospitality VAT returns to standard VAT rate
30 Jun 2022 Italy Ends gas temporary VAT rate cut
1 Jul 2022 Italy Major updates to SdI e-invoicing
1 Jul 2022 Sweden Raises VAT registration threshold
1 Jul 2022 Netherlands Cuts energy VAT to 9% until Dec 2022
1 Jul 2022 Romania E-invoicing for fraud 'risky' goods mandated
1 Jul 2022 Egypt B2C e-invoicing mandatory
1 Jul 2022 Australia Gig & sharing marketplace reporting July 2022
1 Jul 2022 Philippines EIS VAT e-invoicing
1 Jul 2022 Suriname Implementation 12% VAT regime
1 Jul 2022 Korea, South Foreign digital services transaction reporting
1 Jul 2022 Vietnam B2B e-invoicing
1 Jul 2022 Anguilla Implements 13% GST
1 Jul 2022 US Alaska potential 2% sales tax implementation
1 Jul 2022 Canada British Columbia marketplace facilitator PST liabilities
31 Jul 2022 Vietnam Completes mandatory B2B e-invoicing rollout
16 Aug 2022 Czech Reversal of COVID-19 emergency rate cuts
1 Sep 2022 Ireland Tourism and hospitality VAT rate returns to 13.5%
30 Sep 2022 Uruguay 13% tourism COVID-19 VAT cut ends
1 Oct 2022 EU EU VAT in the Digital Age proposals
1 Jan 2023 EU Tourism operators margin scheme reforms proposal
1 Jan 2023 Germany Restaurant and catering return to 19% standard rate
1 Jan 2023 France Introduction of VAT group option
1 Jan 2023 UK VAT penalty regime reforms
1 Jan 2023 Hungary Potential SAF-T HU introduction
1 Jan 2023 Portugal ATUD numbering on invoices
1 Jan 2023 Portugal Qualified electronic signature requirement on invoices
1 Jan 2023 Greece Ends COVID-19 temporary reduced rates
1 Jan 2023 Bulgaria Hotel, trouism, health, catering 9% VAT rate ends
1 Jan 2023 Switzerland Potential VAT rise to 8.1%
1 Jan 2023 Lithuania Hospitality; sport and cultural events VAT returns to 21% rate
1 Jan 2023 Slovakia IS EFA e-invoice proposal 2023
1 Jan 2023 Serbia B2B transactions (following 2022 B2G)
1 Jan 2023 Jersey Foreign e-commerce and marketplaces into GST net
1 Jan 2023 EU DAC 7 marketplaces seller transaction reporting
1 Jan 2023 Ukraine SAF-T phased introduction
1 Jan 2023 Kuwait VAT or excise tax implementation
1 Jan 2023 Oman Potential e-invoicing introduction
1 Jan 2023 China Fapiao special invoice mandatory
1 Jan 2023 SIngapore Increases GST to 8%
1 Jan 2023 SIngapore GST exemption withdrawn on e-commerce imports
1 Jan 2023 Malaysia Sales tax on low-value import consignments
1 Jan 2023 Vietnam Crisis 2% VAT cut on basics is withdrawn
1 Jan 2023 Australia Australia PEPPOL e-invoicing 2022
1 Jan 2023 US Missouri sales tax on foreign e-commerce
1 Jan 2023 Uzbekistan Cuts VAT to 12%
1 Jan 2023 UAE Potential e-invoice implementation
1 Jan 2023 Aruba Implements 12.5% VAT
1 Jan 2023 Chile Extends VAT to many services
1 Jan 2023 Poland Mandated e-invoicing introduced
1 Mar 2023 Ireland Tourism VAT rate returns to 13.5%
1 Jul 2023 Belgium Phased B2B e-invoicing mandate
1 Jul 2023 Australia Peppol e-invoicing
1 Sep 2023 Thailand Raises VAT to 10%
1 Oct 2023 Japan Tax qualified invoices
1 Jan 2024 Spain Likely start of e-invoicing rollout
1 Jan 2024 Spain Invoice software certification
1 Jan 2024 SIngapore Increases GST to 9%
1 Jul 2024 France Rollout of e-invoicing starts
1 Jan 2025 EU Increased VAT rate setting freedoms
1 Jan 2025 EU VAT rate thresholds change foreign companies
1 Jan 2025 Latvia B2B e-invoices mandated

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