Wednesday, March 11, 2015

Sundry shops run by elderly closing because of GST?

The sundry shop that my father, and now me, use will be shutting down. They are run by a Chinese Malaysian elderly uncle and aunty.

And I asked them why? The answer was GST

They now do not even have a computer - they calculate the price using a calculator and write it on a piece of paper - and people pay that amount. Now, for the purpose of GST, they will need to get a GST machine (well, I believe it is a computer with necessary program.) They said the government said it will cost RM4,000 - but when they inquired to purchase, they found out that a good one will cost them RM15,000 and the cheapest OK one will cost them about RM8,000.

Then, they said that even if they get the machine, they do not have the capacity to use it...and do the needful for the submission of the required forms, etc to the Customs. This meant that they have to hire someone just for the GST - this they said will be difficult for them. Currently, just they husband and wife, both more than 65-70 years old.

I said how come your small sundry shop is affected by the GST?

They said in the sundry business, profits are really not very high - for some items, profits are really about 3 cents only. But, if one were to calculate the total cost of the items they have to order per year, this is more than RM500,000 to a million plus sometimes. Worse, they said that the GST monies have to be paid when you receive the items from the supplier - not after it is sold. 

They said that one other establishment, they said it was a petrol station(not confirmed by me), whenever a tanker supplies the fuel, for GST they will have to pay RM4,000 per tanker, and they receive many tankers per month. That station, they said, would most likely be closing down. 

They said that it is not only their shop but many other small business establishment will be forced to shut down by reason of the GST. It is OK for the big supermarkets, but it is really a great hardship for small businesses like sundry shops.

And now, they said many of these establishment are being fined a lot because of non-registration for the GST. The government is 'killing' us small businesses - especially run by older folks and others who just do not have the necessary computer skills.

Retailers are the victims. The government, they said have 'price controls' but the problem is that it is only on the retailers - not the suppliers and producers/factories, who do not reduce prices so the retailer is the only victim. We depend very much on suppliers and 'whole-sale persons' - and they sell things at their price, and we have no choice to buy at their prices or have no goods. 

Comment:- Really, when there are price control exercise, it should focus also on the producers/factories and wholesalers/suppliers not just the retailers. How can you control the price of chicken when there is no control of the price of chicken food? or the price of transport cost? Every thing is inter-related. Small retailers, unlike big shopping establishment, really have little or no bargaining power with these suppliers - furthermore the quantity they require is small.

Previously, the 'taxes' was imposed on the point of origin which was the factory/production/farms/suppliers - and this immediately was incorporated into the prices. It was easy and the retailer will only be subjected to paying taxes on taxable income of their businesses. 

Now, so much additional burden is transferred to the small shops/retailers/businesses - and all this will result in increase of cost > and will certainly make it impossible for the honest simple folk.

Big business opportunity for those involved in making those 'GST machines' but really it is destroying the lives of many old folks and simple people with no knowledge/capacity in computers, to learn new ways of recording sales, calculating GST,... etc

I would agree with Mahathir - scrap the GST.


Scrap GST or lose votes, Dr M tells people to warn BN

Former prime minister Tun Dr Mahathir Mohamad is telling Malaysians to voice out their grouses on the goods and services tax by telling Barisan Nasional that it will lose elections if more taxes are imposed. – The Malaysian Insider pic by Nazir Sufari, March 11, 2015. 

Former prime minister Tun Dr Mahathir Mohamad is telling Malaysians to voice out their grouses on the goods and services tax by telling Barisan Nasional that it will lose elections if more taxes are imposed. – The Malaysian Insider pic by Nazir Sufari, March 11, 2015.
‎It is up to the public to tell Barisan Nasional (BN) that it may not be re-elected again if more taxes are imposed, says former prime minister Tun Dr Mahathir Mohamad.

Referring to the goods and services tax (GST) which takes effect next month, Dr Mahathir today said that if the rise in cost of medicines was burdensome to the people, they should let Putrajaya know.
"‎It is for the people to respond. If this is a burden for them, they can tell the government, 'Please don't add any more taxes‎'," he said at a press conference in Serdang today.
"‎If you charge taxes, we will not vote for you anymore‎." The outspoken former prime minister was commenting that not all medicines, including essential ones, will be GST-exempt. Only medicines under the National Essential ‎Drug List would be zero-rated.

He said it was inevitable that healthcare costs would go up with the GST as would "everything else".

Medical practitioners had voiced concerns over this previously, with the Federation of Private medical Practitioners' Associations Malaysia saying that the list of drugs under the NEDL was not the complete one for the treatment of all important diseases and their complications.

Another report had said as of today, only 320 medicines were zero-rated, representing 1.3% of the total 43,000 registered medicines.

Dr Mahathir, who is a former doctor, also noted that it was a "miracle" that Putrajaya was able to finance free medication in government hospitals, given that costs have escalated from when he was practising.

"When I was prime minister, we were worried about how to finance the free medicine that we were giving to Malaysians.

"During the British time when I was still practising, it was 1 cent per bottle of cough mixture. So the government wasn't spending too much money. But costs of medicine have gone up.

"How the government can still sustain this free medical treatment is something that is almost a miracle.”
However, in his usual caustic manner, Dr Mahathir said although there were suggestions to introduce an insurance system then, the idea never took off as "Malaysians did not like to pay for anything".

"There were various suggestions that we should have health insurance. But Malaysians do not like to pay for anything.

"So long as we don't ask them to pay for their treatments, I think we (the government) are doing well," he said after witnessing the signing of an agreement between Perdana University and University of California, San Diego (UCSD) earlier for the latter's medical and research programme.

In his speech to medical students at the university, Dr Mahathir also noted that people were now rich enough to seek treatment in private hospitals, which "charged any amount they like".

"When I was a private practitioner, I charged only RM3 for treatment and with injection, it was RM5.

"I charged only RM3. Is that very expensive? I wasn't that rich at that time. But I made it somehow.

"Which is why I focused more on politics. Compared with what I was making as a private practitioner, my pay as a prime minister was a big sum. I thought the government was being generous to give that amount to an ex-doctor to do something that I was not trained for," he said, as the crowd burst into laughter.

The former prime minister noted the importance of the collaboration between Perdana University and UCSD, saying that it would contribute much to the development of the nation's healthcare.

"We need to know of other procedures that are carried out in other countries. No matter how much we know of things, there is always something else that we do not know of.

"We cannot claim to know everything. That is why we need to collaborate with others who specialise in other diseases. I am sure it will contribute much to the healthcare of the country."

Dr Mahathir also again highlighted the importance of teaching Science and Mathematics in the English language in schools, noting that this was how the local medical field could keep up with the world.

"I always feel that we have to study science in English although I am a great nationalist who wants to promote the national language.

"But for practical purposes, we have to acquire a sufficient command of English so we can understand the new discoveries, new research papers on medicine, which will not come in our national language but in English."

In 2003, Dr Mahathir, who was then the prime minister, had reintroduced the teaching of both subjects in English to address the declining proficiency of the language among Malaysian students.

However, the decision was reversed in 2009 by Education Minister Tan Sri Muhyiddin Yassin, six years after Dr Mahathir retired from politics. – March 11, 2015.
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