Dear Valued Clients,
Welcome to our E-Newsletter June 2018
May has been another busy month for Malaysia. For more than 60 years, Malaysia has been ruled by the Barisan Nasional (BN) coalition. Giving the opposition coalition the opportunity to form a government is a profound change of direction for Malaysian’s voters.
The Changing Tide of Malaysians Politic
On May 10, Malaysians woke up to a new government – the unprecedented GE14 results have ousted the Najib-led government, and made way for Tun Mahathir’s return to the office. Tun Mahathir was sworn in as Malaysia’s 7th Prime Minister on May 10, signalling the new chapter of Malaysia’s future. Dr Mahathir assured that the new government pledge to remain as the business-friendly trading nation – a concept of Malaysia incorporated mooted by the government.
Everything officially changed on May 10, but the long weekend effectively delayed the start of the new era. Along with its own extensive policy manifesto, the newly formed government gets down to business. Among many others, Prime Minister has setup the Council of the Elderly to reform and restructure the nation’s economy. Spearheaded by Tun Daim, the Council has the task of generating new revenue streams, as the new government seeks to manage the reduction of 6% GST and the stabilisation of fuel prices.
On 16 May 2018, the Ministry of Finance announced that the Goods and Services Tax (GST) will be set to zero percent (0%) effective from 1 June 2018, which is this coming Friday. The new government has pledged to replace the GST with sales-and-services tax.
1. What does this means to us?
- The GST Act is not repealed yet, until further notice.
- You will need to comply with the GST regulations, until further notice.
- You will need to charge GST at 6% GST standard rate from now to 31 May 2018.
- From 1 June 2018 onward, the tax rate is 0%.
- You are still required to issue a tax Invoice for all taxable supply, showing 0% GST from June, until further notice.
- You will need to submit the GST 03 return form as usual, when it’s due.
- You will need to pay the net GST payable or claim back the net GST refund upon submitting the GST return.
2. What should you do (while waiting for the GST treatment to be finalised)?
- Refund of 6% GST
If you want to issue any invoice or collect any advance payment before 01 June 2018 but service rendered/ good delivered on/after 01 June 2018, you can continue to charge 6% GST now and refund 6% GST to client using credit note after Custom confirm the GST treatment.
- Adjustment of pricing
You also need to prepare to adjust the your pricing, from 01 June 2018 onward, for GST registered person, all your price must exclude GST portion. For example, your price tag of RM321 W/GST before 01/06/2018 (6% GST) must change to RM300 W/GST on/after 01/06/2018 (0% GST).
- Customize your tax invoice
Customise your tax Invoice to change the tax rate from 6% to 0% ( please contact your software if you are unsure how to do it).
- Read the FAQ from custom website
As at today, the Custom has released a total of 4 FAQs for the new GST treatment from 17 May 2018 to 25 May 2018.
For 3E Accounting’s internal invoice, except for annual renewal invoices which we will apportion base on period, otherwise, you can ignore the GST portion if you are making payment to us after 01 June 2018.
New Government, More Business Opportunities
While some people do not see eye to eye with the government on the move of scrapping the 6% GST, Oxford Economics commented that there are bright sides of everything. For one, the reduction of GST to 0%, stabilisation of petrol prices and increment of minimum wages, will boost consumer spending and ease the rising inflation. For another, the new government has brought in a breath of fresh air in the nation, symbolising more business opportunities.
Now is the right time to venture and do business in Malaysia. We understand the challenges ahead and we are here to help you to navigate through all challenges. As one of the leading accounting firm in Malaysia, 3E Accounting is ready to help you start or grow your business in Malaysia. In addition to this, we have setup a Malaysia Desk in Singapore – now you can tap into all resources to do business in Malaysia easily, even you are in Singapore.
New Member in 3E Accounting International Network
Our company is committed to a policy of diversification and a broadening of our customer base, to make our services more attractive to customers through an increased reliability and confidence in our products. We have extended our services with the increase in the geographic spread of the global network. The newly joint member – Barbados, has strengthened our standing in global accounting network. The journey of International Network is never-ending. However, with the support of our team and clients, we are confident that the company will continue to scale milestones of excellence for years to come.
The world today is changing faster, more unpredictable and with greater shifts: politically, socially, technologically and economically. With change comes disruption, and big opportunities. We are optimistic that given the strength and reputation of new government, our economy will be able to grow and excel.
Read More in our E-newsletter June 2018, GST Reduce to Zero.