BERNAMA - Proper Management Of Transaction Records Vital For GST To Be Successful, Says Expert
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Proper Management Of Transaction Records Vital For GST To Be Successful, Says Expert
KUALA LUMPUR (Bernama) -- The enforcement of the Goods and Services Tax (GST) on April 1 saw many Malaysians perusing receipts issued to them by the restaurants or shops they had patronised to either find out the exact quantum of the new consumption tax or if they had been taken for a ride.
Social media users have been busy sharing their opinions, information and receipts, as well as voicing out their grievances through Facebook, Twitter and blogs. Among the topics that drew heated discussions were transparency in the implementation of the GST, and monitoring and enforcement activities.
Prime Minister Datuk Seri Najib Tun Razak himself went out "shopping" to get a first-hand account of what the situation was like on the first day of the implementation of the six per cent GST, which has replaced the Sales and Services Tax of up to 16 per cent.
Over the past few days, there had been much confusion among consumers and even retailers over the new tax but this was expected as there were bound to be teething problems. In fact, economic analysts estimate that it would take some six months or so for the people to familiarise themselves with the workings of the GST and regard it as part and parcel of their daily lives.
The GST is part of the government's fiscal policies to generate a more stable source of revenue and implement a more effective, efficient and transparent taxation system. With its implementation, Malaysia joins the ranks of 160 countries which have already implemented the GST, including seven ASEAN members - Indonesia, the Philippines, Thailand, Singapore, Vietnam, Cambodia and Laos.
NEED FOR EFFICIENT MANAGEMENT OF RECORDS
One thing was quite obvious on April 1 - most consumers chose to retain their receipts and invoices, instead of discarding them in the wastepaper basket as they would normally do.
Incidentally, this - keeping receipts and invoices - was exactly the point records management expert Alwi Mohd Yunus tried to drive home when he explained how important it was for the GST's implementation to be backed by an efficient and effective information and records management system.
The information and records pertain to all sale and purchase transactions carried out by businesses.
Since the GST's structure covers every level of a product or service's supply chain, from the procurement of raw materials to manufacturing, distribution, wholesale and retailing, it calls for proper management of records at each stage, he told Bernama.
"This will ensure that the GST is only being imposed on the rightful goods and services. By maintaining a systematic and transparent information and records management system which is accessible to the public, both businesses and consumers can cope with the implementation of the GST," said Alwi, who is a senior lecturer at the Centre for Records Management Studies at Universiti Teknologi MARA (UiTM) Puncak Perdana Campus' Faculty of Information Management.
He said the availability of transaction records and information on GST-entailed goods and services would make it easier for the people to make references to prices and make informed choices when they went shopping.
"It should be as detailed as possible and the public should be allowed to have access to the information at all times through various channels like the Internet or through their android or iOS applications," he said.
Alwi also called for a systematic online process for disgruntled consumers to post their complaints and the transaction records of retailers or traders who abused the GST.
"The process of registering such complaints should be made simple, quick and brief. Based on these records, the enforcement authorities should carry out their follow-up action quickly and effectively," he said.
On March 30, the Domestic Trade, Cooperatives and Consumerism Ministry launched the MyKira GST application to check the impact of the GST on the prices of over 10,000 items.
There are three types of supplies listed under GST, namely standard-rated supplies of goods and services which are subject to the six percent rate; zero- rated supplies which are subject to a zero rate that is not liable to GST at the output or input stage; and exempt supplies which are non-taxable and not subject to GST at the output stage, that is, when supplied to the consumer. However, the GST paid on input by the businesses cannot be claimed as tax credit.
"Whatever the situation is, it's the role of any company's GST system to maintain up-to-date records of sale and purchase transactions of all goods and services. This will make it easier for the retailer, wholesaler or manufacturer to claim credit," Alwi said, emphasising the importance of keeping records of all invoices and receipts issued in respect of the GST.
REINING IN BLACK MARKETEERS
He was also confident that the GST would help check the activities of black marketeers.
"It appears that the GST may help to reduce black market activities because only traders who maintain up-to-date sale and purchase records are entitled to claim tax inputs and maybe even bank loans.
"If a GST-registered entity buys from the black market, it won't be able to claim any tax inputs, thus increasing its cost of doing business. In this context, it should be noted how important it is to maintain proper documentation and transaction records in this GST era - in other words, all businesses concerned will need to have an efficient and effective records management system," he said.
Besides manufacturers and retailers, consumers too should develop the habit of keeping records of all sale and purchase transactions, he said.
"This is to make it easier for those concerned to claim GST credits, as the government too has proof of the recorded transactions," he said, adding that the absence of transaction records would indicate wrongdoing at some stage or other which, eventually, may lead to public perception that the new consumption tax had failed in meeting its objective.
Alwi said industries, manufacturers, distributors and retailers should quickly make changes to their business systems to ensure that all GST-related records were maintained efficiently to show proof of transaction and payment of tax.
"At the same time, consumers should also change their attitudes and pay more attention to their goods and services transaction records. Receipts should come with complete information so that they can be produced as proof in the event of fraud pertaining to GST," he said.
In the context of the implementation and enforcement of the new tax, Alwi said it was vital for the authorities concerned to have a comprehensive database of the pre- and post-GST prices of goods and services.
The reason for having such a database was to prevent unreasonable price hikes, post the implementation of the GST, he said, pointing out that it would be difficult to make price comparisons and analyse the impact of the price increases in the absence of such data.
"The same applies if there are no records of pre-GST production costs and cost of sales of goods and services, as comparisons cannot be made with the post-GST prices. In such a case, the authorities cannot take action against errant manufacturers.
"In the end, consumers are the biggest losers. This will affect consumer sentiment and create the false perception that the GST causes higher inflation. Actually, the GST is a taxation system that prevents leakages and enhances government revenue which, in turn, will strengthen the nation's economy," he said.
Alwi said only by having an efficient and effective system of documenting transaction records could businesses and others concerned comply with the GST's policies and rules.
"This way, the authorities can carry out their enforcement work effectively and there will be no irregularities in respect of GST. Consumers will end up feeling protected and develop a more constructive perception of the GST. What's more, the nation's economy will get stronger and the resulting development and progress will benefit the people," he added.