ImportNEWS

Are Your GST Preparations on Track?

 
I understand that there may be a melting pot of confusion out there in regard to GST matters. It seems that some think that GST implementation is a straightforward, easy and quick fix to implement into your business operations, but it is not simple at all. In terms of the accounting and reporting framework, Income Tax and the Goods and Services Tax, are very different in their administration and practical applications. The GST system is a complex one.
Good GST preparedness including the necessary practise period of at least one month minimum will take at least three months. For the SMEs that have not yet registered nor started preparations, there is one thing that is certain. They will probably end up right smack in the middle of a GST preparations backlog and traffic jam. It seems that the majority of SMEs have put their heads in the sand, and are waiting for either everyone else to lead the way, or for the government to change their minds and back down on the introduction of GST.  This of course is not going to happen. The new Goods and Services Tax is certainly going to commence on the April 1, 2015, whether a number of SMEs receive penalty fines for not being ready, or not! And from what the Deputy Finance Minister Datuk Chua Tee Yong has stated on September 8, these fines will be imposed both for those who qualify but have not registered, and also for those who have registered but are not GST ready. This penalty can incur a fine of up to RM20,000 depending on the number of days that you are late in registering. He stated that a grace period will apply only for those who are experiencing natural teething problems within their systems. 
There is also the issue that many SMEs may not have already thought of. That is, the voluntary registration for those who are not required to register because they do not meet the RM500,000 threshold. There may be some SMEs who choose to register for the following reasons. Firstly, SMEs along the supply chain of production, may have customers who require a GST tax invoice in order for them to receive a GST Refund, which lowers their costs. Only GST Registered entities can issue GST tax invoices. So, it is possible that even the most loyal and long-term customers may need to seek out alternative GST registered suppliers. This in turn may force the hand of some SMEs to register. The second reason is, SMEs will find that overall costs will increase as the majority of goods and services will now be subject to GST when its implementation begins in April 2015. If these businesses want to lower their costs by receiving a GST refund, they will need to be registered.  
Any SME that is clever enough to jump ahead of the last minute rush, that will ensue in the not so distant future, shows foresight and intelligence. They will surely beat and thankfully not join, the throngs of many businesses trying to access limited quality training courses all at the same time in the latter part of this year. So now is the time to start preparing. It will not go away. The Government E-Voucher of RM1000 which assists in the purchase of GST compliant accounting software, will end on December 31 this year, if not before. Once the quota has been reached, it will stop anyhow. So again, registering to receive this money sooner rather than later, is the clever thing to do. The purchasing of appropriate new accounting software which is GST compliant is necessary. These preparatory steps are by no measure a quick day-long, week-long or month-long process. To get it right, finding good training organisations is imperative. They need to be facilitated by skilled trainers who are fully conversant and experienced in both the theory and the practical applications of the GST system using compliant accounting software programs. This all takes time, practise and experience.
Some careful thought and consideration needs to be going into preparations for the coming GST taxation system that is soon to arrive on your doorstep, and it needs to be happening now.  May you make wise decisions in the immediate future. Happy hunting!
Angie NgJC Ng & Associates
 

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