Advantages and

Disadvantages
of GST
compared to SST
By Noor Nahjiha Hussien

SST and GST

SST

SST is a single stage tax.

For example: manufacturer of

XYX can drink pays 10% sales tax
to government and when the
product reach to fine dining, the
restaurant will need to collect 6%
service tax on behalf government
and ended up the end consumer
will need to pay a total of 16%
tax to the government.

GST

GST is a multistage tax which

based on consumption.

For example: manufacturer

pays 6% and fine dining
restaurant pays as well 6%,
as a result the end consumer
pays up a total of 12% of
GST tax.

SST and GST

From SST to GST because

SST
cascadi
ng
effect

GSTadminis
trated
in fully
comput
erized
environ
ment

GST and SST

Implementation of GST could stimulate

the economic growth and increase the
competitiveness in the global market.
The collection of the GST can increase
the revenue from the tourism industry some revenue is extracting directly
from tourists where the tourists spend
on goods and services that made in
Malaysia and overall government
revenue will be increased.
The introduced of GST can improve the
Malaysian standard of living by the
larger funding available to invest for
existing improvement and better future
development.

Demand of the market decrease

Limited purchasing power of households.
Burden the low income working group.
Due to the increased products prices and high cost
of living, people may not willing to spend so much
as their limited purchasing power and the market
demand will substantially affected.
High rate of unemployment
The businesses have to decrease the supply to
meet the current condition of lower demand.
The businesses have to cut down the expenses such
as labour cost due to the lower output needed.
Unfairly redistribution of increased tax
revenue
GST involving complex accounting system and
required proper audit systems too.