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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  GST was first introduced in April 2015 to replace SST, but was withdrawn in July 2018 and SST reimplemented. Any GST reintroduction could happen by 2023.

Malaysian Prime Minister, Ismail Sabri Yaakob, reportedly said last week that the government was keen on reimposing GST as it has lost RM20 billion (US$5 billion) in tax revenues since its withdrawal.

Last year, 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.

172 countries have a VAT or GST regime.

How Malaysia fell out of love with GST the first time (2015 to 2018)

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 June 2018 following election commitments by Pakatan Harapan.

Future global VAT / GST changes

Date Country VAT / GST  changes (click for details)
1 Sep 2022 Cyprus Heating VAT returns to standard rate
1 Sep 2022 Slovenia Cuts domestic energy VAT to 9.5%
1 Sep 2022 Sri Lanka Raises VAT to 15% from 12%
1 Sep 2022 Peru Cuts tourist accommodation VAT rate
30 Sep 2022 Uruguay 13% tourism COVID-19 VAT cut ends
1 Oct 2022 Germany Cuts energy VAT to 7% for 6 months
I Oct 2022 Spain Cuts VAT on natural gas until end of the year
1 Oct 2022 India Lowering of e-invoicing threshold
1 Oct 2022 Uruguay Tourism VAT emergency cut ends
1 Nov 2022 UK All businesses on MTD filing; old portal closes
16 Nov 2022 EU EU VAT in the Digital Age proposals
30 Nov 2022 Kenya Full e-invoice implementation
1 Dec 2022 Finland Emergency electricity VAT rate cut to 10%
31 Dec 2022 Italy Emergency cuts in domestic gas VAT rate end
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 Luxembourg Temporary VAT rate cut to 16%
1 Jan 2023 Ireland Print and digital newspapers reduced to 0% VAT
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 Portugal Accounting SAF-T invoice listing for non-resident businesses
1 Jan 2023 Greece Ends COVID-19 temporary reduced rates
1 Jan 2023 Poland VAT Groups introduced
1 Jan 2023 Poland SLIM VAT 3; 20 reforms to Polish regime
1 Jan 2023 Bulgaria Hotel, trouism, health, catering 9% VAT rate ends
1 Jan 2023 Lithuania Hospitality; sport and cultural events VAT returns to 21% rate
1 Jan 2023 Romania Potential rises for hotels and other services
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 harmonised digital platform VAT transaction requests
1 Jan 2023 Bulgaria VAT registration threshold rise
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 India India cuts e-invoicing threshold to ₹5 crore
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 Reduction of VAT rate to 12%
1 Jan 2023 UAE Potential e-invoice implementation
1 Jan 2023 Guinea-Bissau Implements VAT
1 Jan 2023 Suriname 15% VAT implementation
1 Jan 2023 Brazil Extension of e-invoicing to small companies
1 Jan 2023 Chile Extends VAT to many services
1 Jan 2023 Maldives Raises GST to 8%
31 Jan 2023 Romania First SAF-T returns due
1 Feb 2023 Botswana Ends temporary VAT cut to 12%
1 Mar 2023 Ireland Tourism VAT rate returns to 13.5%
1 Mar 2023 Belgium Electricity and heating VAT rate cut ends
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 2023 Switzerland VAT rises to 8.1%
1 Jan 2024 Poland Mandated e-invoicing introduced
1 Jan 2024 Slovakia IS EFA e-invoicing for B2B and B2C
1 Jan 2024 Bahrain Potential e-invoicing implementation
1 Jan 2024 SIngapore Increases GST to 9%
1 Jan 2024 Aruba Implements 12.5% VAT
1 Apr 2024 New Zealand 15% GST on gig and sharing economies digital platforms
1 Jul 2024 Belgium Phased B2B e-invoicing mandate
1 Jul 2024 Spain Certified electronic invoice software
1 Jul 2024 France E-invoice and e-reporting for B2B and B2C
1 Jul 2024 Bhutan Implementation of VAT
1 Jan 2025 EU Increased VAT rate setting freedoms
1 Jan 2025 EU VAT rate thresholds change foreign companies
1 Jan 2025 EU EU VAT rule changes on cross-border virtual events
1 Jan 2025 Latvia B2B e-invoices mandated
1 Jan 2025 Indonesia VAT rate to rise 1% to 12%

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