The Impact of Imposing GST On SMEs Economy in Malaysia

Shadia Suhaimi, Nur Baiti Shafee, Haniza Hashim, M. Nirmala Devi, Teng Shai Yen, Nor Haliza Che Hussain

Abstract


This research paper is to identify what are the effects when government implement Goods and Services Tax (GST) towards Small and Medium-sized Enterprises (SMEs) in Malaysia. Basically, SMEs has a very important role in the development and growth of Malaysian economies. They can be considered as a backbone of the economy. However, because of the low business volumes compared to supermarkets, it has put SME at a disadvantage when GST has been implemented. This study used survey method in gathering data and 150 questionnaires has been distributed to SMEs in several states in Malaysia; which are Melaka, Johor and Kuala Lumpur. Since the implementation of GST has been started on 1st April 2015, there are many concerns from SMEs on how the implementation will be affecting their business. Hence, this research will clarify their concern by using four variables, which are the record keeping, compliance costs, cash flows and sales.

Keywords


Goods and Services Tax (GST), Small and Medium Enterprises (SMEs), Malaysia

Full Text:

PDF

References


Breen, J., Bergin-Seers, S., Roberts, I., & Sims, R. (2002). The Impact of the Introduction of the GST on Small Business In Australia. Asian Review of Accounting, 10(1), 89–104. http://doi.org/10.1108/eb060751

Dhond, S. S. (2010). Impact of sales tax, vat & gst on the profitability of organizations., (10).

Drever, M., and P. Hutchinson. (2007). Industry Differences in the Determinant of the Liquidity of Australian Small and Medium Enterprises. Small Enterprise Research 15 (1) 60.

Evans, C. and Tran-Nam, B. (2001, July). The Compliance and Administrative Costs of the TVM: What are the Implications? Paper presented at the Tax Value Method Consultative Conference organised by ATAX for the Board of Taxation, Crowne Plaza Coogee Beach, Australia.

Green, C.J., Kimuyu, P., Manos R., Murinde, V. (2002), How do Small Firms in Developing Countries Raise Capital? Evidence from a Large-Scale Survey of Kenyan Micro and Small Scale Enterprises, Economic Research Paper No. 02/6, Centre for International, Financial and Economics Research, Department of Economics, Loughborough University

Guideline for new SME definition. (2013, October 2013). Retrieved from http://www.smecorp.gov.my/images/pdf/Guideline_New_SME_

Hoq, M. Z., Lumpur, K., Ha, N. C., & Said, S. M. (2009). SMEs in the Malaysian Economy. International Journal of Marketing Studies, Vol.1(No.2), 3–17. http://doi.org/10.2139/ssrn.1851426

Khalique, M., Abdul, J., Shaari, N., & Ageel, A. (2011). Challenges faced by the Small and Medium Enterprises (SMEs) in Malaysia: An Intellectual Capital Perspective. International Journal of Current Research, 3(2010), 398–401.

Lejeune, B. I. (2013). The EU VAT Experience: What Are the Lessons ? World.

Lignier, P., & Evans, C. (n.d.). The rise and rise of tax compliance costs for the small business sector in Australia, (June 2012)

Lussier, R. N., & Halabi, C. E. (2010). A Three‐Country Comparison of the Business Success versus Failure Prediction Model. Journal of Small Business Management, 48(3), 360-377. http://dx.doi.org/10.1111/j.1540-627X.2010.00298.x

Mungaya, M., Mbwambo, A. H., & Tripathi, S. K. (2012). Study of Tax System Impact on the Growth of Small and Medium Enterprises ( SMEs ): With Reference to Shinyanga, 9519.

Naiyeju J.K. (1996). Value Added Tax: The Facts of a positive Tax in Nigeria, Lagos: KUPAG Public Affairs, National Accounting Standard Board (NASB) (2003).“Statement of Accounting standard” SAS 19 Vol. 2 Accountancy tutors Ltd.

Narayanan, S. (2014). the Impact of the Goods and Services Tax (Gst) in Malaysia: Lessons From Experiences Elsewhere (a Note). The Singapore Economic Review, 59(02), 1450009. http://doi.org/10.1142/S021759081450009X

Nor Hafizah, A. M., & Azleen, I. (2013). Goods and Services Tax ( GST ): A New Tax Reform in. International Journal of Economics Business and Management Studies, 2(1), 12–19. Retrieved from http://aiars.org/ijebms/journals/ijebmsvol2no1jan2013/PA_IJEBMS_20130159.pdf

Oats, Lynne & Fernandez, P. (1998). GST and The Small Business.pdf.

Oludele A. Akinboade, Emilie Kinfack, (2012) "Regulation, awareness, compliance and SME performance in Cameroon's manufacturing and retail sectors", International Journal of Social Economics, Vol. 39 Issue: 12, pp.933-950, https://doi.org/10.1108/03068291211269073

Palil, M., & Ibrahim, M. (2013). The Impacts Of Goods And Services Tax (GST) On Middle Income Earners In Malaysia. Wrbrpapers.Com, 1(3), 1–16. Retrieved from http://www.wrbrpapers.com/static/documents/July/2011/14. Rizal.pdf

Palil, M. R., Ramli, R., Mustapha, A. F., & Hassan, N. S. A. (2013). Elements of compliance costs: Lesson from Malaysian companies towards Goods and Services Tax (GST). Asian Social Science, 9(11), 135–147. http://doi.org/10.5539/ass.v9n11p135

Patterson, M. M. (1996). Why is it so difficult? The Journal of the American Osteopathic Association, 96(9), 526.

Rametse, N. (2010). An International Perspective on Small Business Implementation Costs of a New Tax and Managerial Benefits Derived. Soweto International Conference on Entrepreneurship & Development, (September), 1–24. Retrieved from http://www.uj.ac.za/EN/Faculties/management/departments/CSBD/Documents/2010 CSBD Conference Docs/BO_Rametse.pdf.

Revenue Research Unit. (2008). Key Administrative Burdens Faced by Revenue’s Small and Medium Sized Business Customers, (March). Retrieved from http://www.revenue.ie/en/tax/it/leaflets/admin-burden-report.pdf

Saira, K., Zariyawati, M. a., & May, L. Y. (2010). An Exploratory Study of Goods and Services Tax Awareness in Malaysia. repo.uum.edu.my/3178/1/S14.pdf‎, 265–276.

Smith, a, Islam, a, & Moniruzzaman, M. (2011). Consumption Taxes in Developing Countries-The Case of the Bangladesh VAT. Working Paper Series No. 82, (82). Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2028663

Tushabomwe-Kazooba, C. (2006). Causes of Small Business failure in Uganda: A Case Study from Bushenyi and Mbarara Towns. African Studies Quarterly8, no.4 [online] URL: http:/web.africa.ufl.edu/asq/v8/v8i4a3.htm, a publication of University of Florida, USA

Zhou, L. Z., Tam, J., & Heng-Contaxis, J. (2013). The Introduction of Goods and Services Tax in Malaysia: A Policy Analysis. Centre for Public Paper Series Asian Strategy & Leadership Institute.


Refbacks

  • There are currently no refbacks.




Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Revista Publicando.

Licencia de Creative Commons

 

This Content is available under licencia de Creative Commons Reconocimiento-NoComercial-CompartirIgual 4.0 Internacional.