Compliance Costs of Goods and Services Tax (GST) among Small and Medium Enterprises

Rosiati Ramli, Mohd Rizal Palil, Norul Syuhada Abu Hassan, Ahmad Fariq Mustapha

Abstract


ABSTRACT

Taxation is one of the most important instruments in generating revenue for a country. History has shown that many countries develop based on tax revenue. Tax- based spending, also known as Goods and Services Tax (GST) or Value Added Tax (VAT) is a consumerism tax posed upon sales of goods and services. It is a potential tax instrument introduced by the Malaysian government in order to broaden and increase tax collection. The implementation of GST in Malaysia is a unique case in which it will replace service and sales taxes. The introduction of GST has had people from all walks of life, from academicians, professionals to the people (taxpayers), debating about the effect of increasing price and decreasing sales and services tax. The Malaysian government expects the GST to minimise individual and corporate tax rates in order to reduce tax liabilities in both entities. Small and medium enterprises (SMEs) are among the focal point of discussion related to the compliance cost of GST. The compliance cost of SMEs is expected to increase as soon as GST is implemented. As the profit of SMEs is relatively low, would they be able to adopt the initial compliance costs of GST efficiently at the time of its implementation? If the SMEs are receptive towards GST, how much are the compliance costs through new development of software system, training of human resources and new accounting system? The International Monetary Fund (IMF) believed that the Malaysian tax system could be enhanced (increased tax collection) by introducing GST. There are two main objectives of this study; first is to identify the compliance costs of SMEs in fulfilling their tax obligations; and second to investigate the expected costs and readiness of these companies in the implementation of GST. In achieving these two objectives, the data were collected from SMEs by using structured questionnaires. This study is significant as it estimates the compliance costs among SMEs as well as outlining recommendations and suggestions to tax administrators so that they could consider the tax liability and compliance cost in their daily operation.

Keywords: Compliance costs; small and medium enterprises; Malaysia; goods and services taxes (GST)

ABSTRAK

Cukai adalah instrumen yang penting dalam menjana pendapatan sesebuah negara. Sejarah telah membuktikan bahawa kebanyakan negara mampu membangun dengan hasil cukai. Cukai berasaskan perbelanjaan yang dikenali sebagai Cukai Barangan dan Perkhidmatan (GST) atau Cukai Nilai Tambah (VAT) merupakan cukai penggunaan yang dikenakan ke atas jualan barangan dan perkhidmatan. Ia merupakan salah satu instrumen percukaian yang diperkenalkan oleh Kerajaan Malaysia bagi mengembangkan dan meningkatkan kutipan cukai. Perlaksanaan GST di Malaysia merupakan kes yang unik di mana ianya menggantikan cukai jualan dan perkhidmatan. Pengenalan GST telah mengundang kritikan dari pelbagai pihak termasuklah ahli akademik, golongan professional dan masyarakat (pembayar cukai) berkaitan kesannya ke atas peningkatan harga dan penurunan cukai barangan dan perkhidmatan. Kerajaan Malaysia menjangkakan pengenalan GST berupaya mengurangkan kadar cukai pendapatan individu dan korporat dalam mengurangkan liabiliti cukai kedua-dua pihak. Perusahaan Kecil dan Sederhana (PKS) menjadi titik fokal dalam perbincangan hang berkaitan dengan kos pematuhan GST. Kos pematuhan GST dijangkakan akan meningkat sebaik sahaja cukai GST dilaksanakan. Memandangkan kadar keuntungan di kalangan PKS adalah secara relatifnya rendah, mampukan mereka menyerap kos pematuhan permulaan GST terutamanya di peringkat awal pelaksanaan GST? Sekiranya PKS tersebut menerima pakai GST, berapakah pula jumlah kos pematuhan yang terlibat seperti pembangunan sistem komputer yang baru, latihan sumber manusia dan pembangunan sistem perakaunan? International Monetary Fund (IMF) percaya kecekapan sistem percukaian di Malaysia dapat ditingkatkan (meningkatkan kadar pungutan cukai) dengan pengenalan GST. Terdapat dua objektif utama kajian ini; pertama adalah untuk mengenal pasti kos pematuhan PKS dalam memenuhi obligasi cukai, dan kedua untuk menyiasat jangkaan kos dan kesediaan PKS ini terhadap perlaksanaan GST. Bagi memenuhi kedua objektif ini, data telah dikutip daripada syarikat PKS dengan menggunakan soal selidik berstruktur.. Kepentingan kajian ini adalah untuk mendapatkan jangkaan kos pematuhan PKS terhadap penerimaan GST dan menyediakan cadangan kepada pihak berkuasa cukai supaya mengambilkira liabiliti cukai dan kos pematuhan untuk menghadapi operasi harian perniagaan.

Kata kunci: Kos pematuhan; perusahaan kecil dan sederhana; Malaysia; cukai barangan dan perkhidmatan (GST)


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