Goods and Services Tax (GST) Governance in the Malaysian New Tax Environment

Abstract

Abstract The government had implemented Goods and Services Tax (GST) starting from 1st April 2015 with 80% to 90% compliance from a taxable person on the first day of its execution with little commotion from end customers. The understanding and awareness of people and taxable person about GST can be seen from the success of the advertisements and programs held by the Royal Malaysian Custom Departments (RMCD) and other government agencies throughout 2014 onwards. GST is known as a multi-stages tax affected to each stage of products or services circulation. In other words, there will be 6% tax imposed on all goods and services with some exception on certain items. Therefore, RMCD shall look after GST governance to ensure that taxable entities are continuously complying with all the regulations enforced under GST Act 2014, GST Rules 2014 and GST Order 2014. The efficiency and effectiveness of tax collection are very important for government to support the socioeconomic development of the country. GST governance as a process in guiding an entity with regards to their tax responsibilities will lead the entity to be more concerned about their contributions to the nation building. This study discusses the GST governance from overseas practices such as governance and risk management, processing and reporting, resources and capabilities and assurance that can be adapted into Malaysian context for best practice actions. It will contribute to the GST literature from the Malaysian perspective which might differ from other countries.