BLUBBERY LIPS TALKS UTTER RUBBISH ABOUT TELCO GST! SHOULD BE SACKED!

by government sex tax, donplaypuks® intrepid correspondent for burdensome tax affairs

It really defies belief that PM Grossmeldajib should merely silence the Deputy Finance Minister charged with the handling of the Goods & Services Tax (GST) implementation, instead of unceremoniously sacking him on the spot. He had 18 months to fine-tune it, and the screw up,  especially over the GST on pre-paid telephone cards, is unbelievable and completely unacceptable. 

CLICK HERE for MI's report on the debacle. 

If there is one piece of evidence confirming that our education system and standards are 3rd world, it is that this deputy minister is reputed to have a degree with a 3.8 GPA! Good God, how and from where did he earn that Grade Point Average and then exhibit a level of intelligence that would be insulting to a cacing (earthworm)?

More than that, what does it say about the intelligence of PM Grossmeldajib, who then delegated the job of resolving GST on pre-paid reload cards to Blubbery Lips who immediately made a hash of it?

How can such a simple matter as this be messed up so much by so few with so much stupidity?

Prior to the introduction of GST, 6% Sales & Service Tax (SST) was included in the price of prepaid cards. The telcos absorbed it because they were making a killing. It's as simple as that.

With the introduction of 6% GST, it is a simple matter of replacing the term SST with GST, and the status quo as to who bears the tax (the telcos) remain unchanged.

Yet Blubbery Lips has got his knickers in a twist and defended Mr.3.8 GPA that the 6% should be added on to the prepaid cards. So, what previously cost the consumer RM10 is now being sold at RM10.60. To add to the idiocy, Blubbery Lips says that the law has to be checked to see if it telcos can voluntarily absorb the 6% GST.

I have worked in 4 countries where GST was implemented long ago - UK, Australia, NZ and Singapore. There is no law anywhere, including Malaysia, that bars the retailer from absorbing GST. In fact, it would be a totally positive move for retailers to absorb GST since prices would not rise i.e. inflation would be contained, while the government would collect the revenue it intended to.

It does not matter to the government whether the consumer pays the tax or the retailer absorbs it. At the end of each quarter, the retailer will either way have to account and pay over to the government the difference between output and input tax. What does it matter to Blubbery Lips or PM Grossmeldajib who bears the tax, as long as the GST is accounted for and paid over correctly to the government? As Chairman Mao once said, "What does it matter if the cat is black or white, as long as it catches the mouse?"

In rushing with indecent haste to protect big businesses and screw the consumers in the process, Blubbery Lips further compounded his show of low IQ by lying that the telcos may have difficulty in absorbing the cost of "systems change". Wtf is he talking about? The system is already there! It would take all of 5 minutes at a cost of RM1 for the telcos to replace the words 'SST' with 'GST'. No more, no less. The system to calculate 6% GST and print out receipts is already there and that is all that would be need to be done. No more, no less!

What has the fact, if Blubbery Lips is correct, and I suspect he is totally wrong, that most prepaid cards are bought by foreigners, got to do with anything? Even if the telcos absorb the 6% GST, they will still have to pay the same amount of money to the government as they used to under the SST system. So, the only reason Blubbery Lips is dithering about a very basic issue is that he too must have got his degree from the same Uni Mr.3.8 GPA went to - the proton mana ada sistem school of ms.management.

Here is sheer absolute proof that we have a government that is run by incompetent, low IQ and plain stupid and ignorant ministers, who in a free market situation, would be hard pushed to find jobs as road sweepers.

If you vote for BUMNO/SCUMNO/Barang Naik come the next general election, be prepared to sink to 4th world status. You can kiss Mahathir's 2020 goodbye!

 Donplaypuks® with simple tax, man!

30 YEARS OF RESTAURANT/EATERY SERVICE CHARGE FRAUD & GST EXPLAINED! OUTLAW SERVICE CHARGE!

by custom and exercise, donplaypuks® intrepid correspondent for robbing the people affairs

It's incredible that Service Charge has been around some 30 years and yet people are confused over who charges it and who actually gets to keep the money. How come all these years everyone who ate at restaurants and even some popular coffee shops keeps scratching their heads over the +10% Service Charge and  +6% Service/Government Tax? 

GST (GOODS & SERVICES TAX, FORMERLY SERVICE OR GOVERNMENT/SALES TAX) IS CHARGED BY YOUR (NOT MY) GOVERMENT. THE GOVERNMENT COLLECTS AND SPENDS THIS MONEY, MOSTLY WASTEFULLY

Your glorious Grossmeldajib, the prime minister who wears the pants, and her husband who wears the skirts and panties, generously increased Service Tax from 5% to 6 % a couple of years ago, without giving any logical reason for it. So, the 6% GST (ex-Service Tax) is charged by your (not my) Government. 

The Customs & Excise Department collects it to blow it, I suppose, on new jets costing RM 450 million, free trips for cronies to Kazakhstan for wedding engagements, 1 MDB etc., all extremely value-for-money spending by those who are increasingly proving to be totally unaccountable to the Rakyat who voted them into office and vested power in them to rule the country justly.

SERVICE CHARGE IS LEVIED BY RESTAURANT/ EATERY OWNERS

Put simply, the +10% Service Charge is levied on unsuspecting customers by the restaurant and NOT THE GOVERNMENT. Legally, the restaurant gets to keep the money. The original logic for charging SC was that many, stressed out trying to figure out how much they should tip waiters, committed suicide or hara kiri, causing a lot of mess on the premises. So, restaurants introduced a fixed 10% Service Charge and added it to the bill to save unnecessary deaths. NO MORE TIPPING!

The restaurant owner is supposed to then divvy up the Service Charge collected and pay it to the waiters as part of their monthly remuneration incentive. My experience in auditing suggests that many restaurant owners take the whole whack for themselves, or in some cases, sapu 50% for themselves, leaving the balance for the waiters as their share. A few honest owners, pass 100% of the Service Charge to the waiters.

Let me explain this with a simple illustration which will show not only the Service Charge, but also, the GST con:

Restaurant food charge -    RM100.00

Service Charge @ 10% - RM  10.00

Sub-total -                           RM110.00

GST 110 @ 6%           -     RM   6.60

Total Bill -                         RM116.60

THE SERVICE CHARGE CON EXPLAINED:

1. When costing in the charge for a restaurant meal, the owner has already included ALL overheads (direct food cost, cooks etc, administration and sales) including the salary, Epf/Socso, OT, holiday pay, increment, health, travel, incentives, etc. of ALL staff, not just waiters, as well as contingencies and recovery of capital expenditure. His profit, would be reflected in the mark up e.g. if the cost is RM1 per meal, then he would charge RM3 for a meal (300% mark up), giving him a gross profit 67%. Do not forget that all businesses also claim back capital expenditure, except for renovations, from the government. So, how is the extra 10% Service Charge justifiable? What do you get for it if the waiter is already paid a salary to do his job? Good behaviour and service from the waiters? But, that's already included and guaranteed in the cost of the meal. Ambiance? That will be claimed from the Government by deduction from profits as capital expenditure allowance.

2. If the service is lousy, can you refuse to pay? Legally, no. You have to take the restaurant owner to court, and really, in practise, who has the time to do this? Laws should be in place to protect primarily the consumer, not just the service provider, yet we have this legally enforced 'pay first, dispute later' law!

3. A well-know newspaper columnist has argued that consumers have a choice. If you don't want to pay Service Charge, you can go to a eatery that does not charge it. But really, is this fair to the consumer? Can you hold a wedding dinner in a coffee shop or road-side stall to avoid paying Service Charge? Why should consumers have to pay, especially since the capital expenditure of many eateries are subsidised by the Taxpayer in the form of capital allowances and tax breaks?

In my opinion, Service Charge should be outlawed. In USA for example, you are expected to leave a tip of 10%-15% of food bill as tips; there is no service charge. Again, to me, this is unacceptable. Tipping and Service Charge should be optional. Let the consumer decide how much EXTRA, if any, the service is worth and tip accordingly. And if waiters are being screwed by restaurant owners with low wages, that's where the law should step in and legislate that they be paid a livable, minimum wage. Leaving everything loaded in favour of business operators, results mostly in the PAYING consumer being taken for a ride.

THE GST CON EXPLAINED

The basic rules of taxation have always been straightforward:

1. No taxation without representation. If a referendum were to be held tomorrow on the single issue of Yes or No GST, it's guaranteed that GST would be thrown out. Did the Grossmeldajibs and BUMNO/SCUMNO/Barang Naik dare ask the Rakyat for a mandate by including it in their General Election 2013 manifesto? Of course, they didn't have the balls to do so. So, we have been screwed once again by your (not my, I did not vote for her, you did) glorious Grossmeldajib, the prime minister who wears the pants, and her husband who wears the skirts and panties.

2. Simplicity. Here again the Grossmeldajibs have failed because, despite several years in the planning, there is total confusion over what is exempt and what is not, and what is taxable and what is not. Is it not incredible that the Transformers in the Grossmeldajibs department with its RM17 billion budget licence to spend without disclosure, transparency or accountability, have NOT come out with a comprehensive GST reference booklet?

3. Fairness. How is it fair? By what logic is Service Tax or GST fair especially when it is the middle and low income citizens who will bear the brunt of it? Did they cut income tax? What has the Government done to improve the Rakyat's lot to justify asking the Rakyat to pay this extra tax on top of Income Tax and Real Property Gains Tax? Simple question: Are potato chips crispier or do they taste better the next day when GST is charged, its flavour improved by a gaji buta Government?

Looking at the example above, you will notice that GST is charged on the restaurant's Service Charge as well. In simple words, you pay 6% GST on the RM100 food cost AS WELL AS 6% on the restaurant's Service Charge!! Your GST bill is 6% x RM100 = RM6 + 6% on Service Charge of RM10 = 0.60 cents, TOTAL RM6.60!!!! 

WTF should the government tax something it contributed nothing to improve? Remember, all this money from GST is going, not to improve your standard of living, but to service interest arising from the RM550 billion National Debt the Grossmeldajibs have run up. Under the Grossmeldajibs, the national debt has more than doubled!! The annual cost of servicing debt alone is about RM25-30 billion. Now you know why GST was introduced - to cover up the total mismanagement of the economy by the Grossmeldajibs!! 

GOVERNMENT BORROWING RM BILLIONS AGAIN

You will have read today that the Government is raising another RM7 billion in bond debt to pay for the loss of money arising from the 15% depreciation in ringgit value this year. The ringgit is the worst-performing currency in Asia this year - 3.70 vs US$ and 2.67 vs Singapore $. Why are we fire-fighting now instead of having properly planned ahead against monetary erosion. You still think that our central bank has been managed well to deserve international accolades and awards? When prime ministers and central bank governors are too long in office, complacency and sloth sets in. That's a natural law.

We need changes here and now and if you vote BUMNO/SCUMNO/Barang Naik again next time, be prepared to stand in rice, bread, sugar, salt and meat queues come 2018,  BRIMming with hunger and fuming in anger.

Get off your backs and support the move to rid this nation, once not so long ago considered a tropical paradise, of the Grossmeldajibs and their entire administration of low IQ incompetents, rogues, economic saboteurs, plunderers and looters - a Government of Thieves and traitors! 

Donplaypuks® with indiscriminate taxes, get rid of the Grossmeldajibs, man!

GST AND SIMPLE ILLUSTRATIONS ON HOW TO ACCOUNT FOR IT!

by Donplaypuks® at http://donplaypuks.blogspot.com

Every now and then, when politicians, economists and their financial con-sultants, together with the Roti Jala's and their clueless laboratory driven and manufactured drivers run out of ideas on how to manage a sinking economy, they will pull out from their collective tattered hats what they will label as 'Our Saviour.'

If PM Najib, his Government of Thieves and cronies, sycophantic and desperate followers and supporters are to be believed, the proposed Goods and Services Tax (GST) will catapult Malaysia soon (it's just round the corner/over them there hills) into first world status.

Believe me, nothing of that kind will transpire. Not with this plan and this government.

In 1978 when I was in London, the GST (VAT or Value Added Tax) rate in UK was 15%. Today, it hovers close to 20%. Has it saved UK? The UK's budget deficit runs at some £120 billion. It's debt at £1.4 trillion represents a Debt:GDP ratio of about 90%, with unemployment at nearly at 8%. The figures for the USA, France, Japan and much of Europe are worse. Japan's Debt:GDP ratios is over 200%, while that of the USA ($17 Trillion debt) is 100% and France 93%. The gap between the rich and the poor has widened in all western economies, despite the introduction of GST and a plethora of taxes such as municipal, provincial and Federal taxes. By any reckoning, Fitch, Standard & Poor, the IMF and the World Bank should have declared these economies broke!

By contrast, Malaysia's Debt:GDP ratio is about 55%. We have virtually zero unemployment, while inflation is below 3%. Yet, Fitch gave a warning to Malaysia about the sustainability of its future income stream, thereby panicking Najib and BUMNO/SCUMNO/DUMBNO into prematurely introducing GST. You may well ask why the double standards practised by these so-called western "watchdogs." Suffice to say they have a clear,  suspicious agenda.

The real problem lies in the fact that despite democracy and "free and fair" elections, WE, THE PEOPLE, have NOT been able to force politicians and governments from over-borrowing, over-spending and keeping to a strict regime of a balanced budget. And when you keep giving more and more money to thieving governments, what else can you expect but an explosion of daylight robbery by Prime Ministers, Ministers and their cronies and supporters? It's not just a Malaysian problem, but a universal one. If we reduce it to a family problem, no matter how much the head of a family is able to increase his income by, can that person stop a financial disaster and eventual bankruptcy if he has an incurable drinking or drug abuse and addiction problem?

So, giving Najib the 6% GST and an additional RM24 billion a year will not save us from an economic slide that will parallel those faced by Greece, Portugal, Ireland and Spain. If anything, it will hasten it. In five short years, Najib has increased his office budget alone by over 300% or to nearly RM17 billion, with huge billion ringgit allocations under vaguely worded headings, suspected to be slush funds. This means that the Taxpayer is probably being fraudulently walloped for party political expenses passed off as legitimate government expenditure. Najib is asking you and me to tighten our belts, while he is spending like there's no tomorrow! Najib is the most profligate prime minister we have ever had, and he has an incurable addiction to wantonly spending the Rakyat's (citizen's) money. After every financial year, Najib has plundered our coffers to cover supplementary expenditure of billions of ringgit of overspending by Ministries and state governments.

130 countries have a GST tax regime? And how many of these are like USA, UK, Japan and Europe, kept afloat by printing, printing, printing money and floating and re-floating bonds and Debt, which even their grandchildren's generation will not be in a position to permanently retire, or even make a serious dent in reducing significantly? Now, that snake oil salesman Najib has embarked on this game too, as though floating Islamic bonds in Abu Dhabi or Samurai Bonds in Japan will miraculously save us. Who does he surround himself with? Why, it's that same posse of con-sultants from USA and UK who, having failed to halt the slide in their own countries, are offering us the same failed strategies and snake oil!

So, GST alone will not save us from looming financial disaster if continually fuelled by gross mismanagement by the Prime Minister and his office.

Be that as it may, let's prepare for what seems inevitable. Here are are some simple matters to note for GST:

1. Only GST registered businesses may charge and collect GST. Charities and government organisations will be exempt from GST. Inter-company transactions may be exempt from GST.

2. GST collection, enforcement and refunds are usually managed by the Customs & Excise Department (C&E) in most countries.

3. The Government will probably introduce a minimum turnover threshold for GST registration. e.g RM500,000.

 4. GST will replace sales and service tax. Exports are exempt from GST. All imports are subject to GST. The Government has not clarified if import duties will be revoked or revised downwards to take into account 6% GST.

5. GST on sales is called Output Tax.

6. GST on expenses is called Input Tax.

7. GST registered businesses are allowed to deduct the Input Tax from the Output Tax, and remit only the net to the C&E. This will probably be done via a GST return to be submitted to the C&E on a quarterly basis. Where Input Tax exceeds Output Tax, the business will be entitled to a refund.

8.Thus, contrary to silly claims made by some uninformed BUMNO bloggers, there is no compounding factor in GST resulting in 19% cumulative price increase to the final consumer. One GST registered business' Output Tax will become the Input and deductible/claimable Tax of another GST registered entity.

9. For non-GST registered businesses, GST will be treated as an expense in its Profit & Loss Account. (See example 2 below). So, smaller businesses are more likely to raise prices than bigger ones.

10. GST CANNOT be claimed as an expense from the C&E by the final consumer i.e. mostly, this refers to individuals like you and me.

11. For GST registered businesses, GST WILL NOT be an expenses. They will become mere collecting agents for the C&E, and the liability or refund will be reflected in the Balance Sheet of the business as a creditor or debtor. (See example 1 below).

12.  Therefore, for registered businesses, there is no compelling reason to raise prices, other than to pass on the increase in administration costs arising from GST compliance.

13. So, for businesses that have turnover below the RM500,000 threshold, it will still benefit them to register for GST. Otherwise, they will have to raise prices to cover the cost of Input Tax on its expenses.

14. Upon introduction of GST, there will be a one-off rise in inflation rate. When 3% GST was introduced in the early '90's in Singapore, inflation jumped to 6% and its took a few months to peter off.

15.  Remember, that regardless of collection, GST registered businesses will have to remit the Output Tax on their sales invoices (after netting off Input Tax). You may not be able to off-set GST on bad debts unless it follows the Income Tax rules for write-offs. So, there may be a cash flow problem. Businesses may have to postpone sales invoicing at the end of the last month of a quarter to the following month, for better cash management!

16. The Income Tax Department will be able to check your business turover disclosed in the P&L with that shown in the GST Returns.. So, it will be virtually impossible for a business to fiddle its turnover/sales.

17. In UK and Europe, GST is not charged for take-away from food outlets, since it is deemed that no service is rendered. GST is of course charged when you have a meal at any food outlet or restaurant. The situation in Malaysia is not clear as the government is still in the process of determining what expense will be exempted, zero-rated or be GST chargeable.

I am sure you will have many queries on the GST regime. Email me and I will see if  I can provide satisfactory answers.

EXAMPLE 1: GST for GST Registered Businesses
XYZ SALES INVOICE REGISTER
Date	Invoice No.	Customer		Sales	GST @ 6%	Total
15.07.14	SI156	ABC S/B		500.00	30.00	530.00
15.08.14	SI157	EFG S/B		700.00	42.00	742.00
15.09.14	SI158	HIJ S/B		800.00	48.00	848.00
TOTAL				2,000.00	120.00	2,120.00
XYZ EXPENSE INVOICE REGISTER
Date	Invoice No.	Supplier		Cost	GST @ 6%	Total
01.07.14	123	Mfg. S/B	Stock Purchases	100.00	6.00	106.00
01.08.14	345	Mfg. S/B	Stock Purchases	200.00	12.00	212.00
01.09.14	456	Mfg. S/B	Stock Purchases	300.00	18.00	318.00
				600.00	36.00	636.00
01.07.14	789	FF S/B	Office Furniture	200.00	12.00	212.00
02.07.14	145	Env S/B	Stationery	50.00	3.00	53.00
15.09.14	333	Mom & Co	Tea/Coffee	15.00	-	15.00
22.09.14	667	Emv S/B	Medicine	25.00	-	25.00
25.09.14	269	Raja & Co.	Legal Expenses	500.00	30.00	530.00
				790.00	45.00	835.00
TOTAL				1,390.00	81.00	1,471.00
1.	XYZ GST RETURN FOR THE QUARTER ENDED 30TH SEPTEMBER 2014
	OUTPUT TAX					120.00
	INPUT TAX					(81.00)
	NET GST PAYABLE TO C&E					39.00
	SALES SUBJECT TO GST					2,000.00
	TOTAL NET EXPENSES					1,390.00
	LESS: EXEMPT/ZERO RATED EXPENSES					(40.00)
	EXPENSES SUBJECT TO GST					1,350.00
2.	XYZ P&L FOR THE QUARTER ENDED 30TH SEPTEMBER 2014
	Sales					2,000.00
	Cost of Sales					(600.00)
	Gross Profit					1,400.00
	Administration Expenses
	Legal					500.00
	Medical					25.00
	Office Refreshments					15.00
	Office Stationery					50.00
						590.00
	Net Profit Before Tax					810.00
3.	XYZ BALANCE SHEET FOR THE QUARTER ENDED 30TH SEPTEMBER 2014
	Fixed Assets					200.00
	Current Assets: Bank a/c					749.00
	Current Liabilities: GST Payable					(39.00)
						910.00
	Share Capital					100.00
	P&L Account					810.00
						910.00

EXAMPLE 2: GST for Non- GST Registered Businesses
123 SALES INVOICE REGISTER
Date	Invoice No.	Customer		Sales	GST @ 6%	Total
15.07.14	SI156	ABC S/B		500.00	-	500.00
15.08.14	SI157	EFG S/B		700.00	-	700.00
15.09.14	SI158	HIJ S/B		800.00	-	800.00
				2,000.00	-	2,000.00
XYZ EXPENSE INVOICE REGISTER
Date	Invoice No.	Supplier		Cost	GST @ 6%	Total
01.07.14	123	Mfg. S/B	Stock Purchases	100.00	6.00	106.00
01.08.14	345	Mfg. S/B	Stock Purchases	200.00	12.00	212.00
01.09.14	456	Mfg. S/B	Stock Purchases	300.00	18.00	318.00
				600.00	36.00	636.00
01.07.14	789	FF S/B	Office Furniture	200.00	12.00	212.00
02.07.14	145	Env S/B	Stationery	50.00	3.00	53.00
15.09.14	333	Mom & Co	Tea/Coffee	15.00	-	15.00
22.09.14	667	Emv S/B	Medicine	25.00	-	25.00
25.09.14	269	Raja & Co.	Legal Expenses	500.00	30.00	530.00
				790.00	45.00	835.00
				1,390.00	81.00	1,471.00
	NB:  NO GST RETURN IS REQUIRED TO BE SUBMITTED TO C&E
1.	XYZ P&L FOR THE QUARTER ENDED 30TH SEPTEMBER 2014
	Sales					2,000.00
	Cost of Sales					(600.00)
	Gross Profit					1,400.00
	Administration Expenses
	Legal					500.00
	Medical					25.00
	Office Refreshments					15.00
	Office Stationery					50.00
	GST					81.00
						671.00
	Net Profit Before Tax					729.00
2.	XYZ BALANCE SHEET FOR THE QUARTER ENDED 30TH SEPTEMBER 2014
	Fixed Assets					200.00
	Current Assets: Bank a/c					629.00
						829.00
	Share Capital					100.00
	P&L Account					729.00
						829.00