Thursday, April 5, 2007

GST: The truths and the myths behind this one hit wonder

Now..this topic was and probably still is fiery hot in a blog that i read..and since i revealed that i work in this particular field, i thought maybe i might try to give another perspective of things. Yes i know that this is a food blog, but why not, try something abit harder that requires my brain to run abit. So here goes..

Contrary to what people say..not everything is subject to GST..but yes, the products in a way are all affected by GST..there are basically 3 different rates..Standard rate..and yes, the rate is still unknown..exempt..which is basically 0 but the GST that is being incurred to make the product cannot be claimed via input tax..(the more layman terms and explainations can be found in zewt's blog).. [TRUTH: Not everything taxable.. MYTH:..Everything taxable] back to our roti canai and nasi lemak..technically there should not be any increase..alot of basic food items such as rice, meat and etc are zero rated..thus no xtra cost for them and because they probably wont meet the threshold to licence for GST..there wont be GST!..So the myth is increase in prices..truth is "should not"..but you know how we increase prices for any damn reason..[TRUTH: I can still go and eat good food..MYTH:. I no need to eat outside anymore]

I guess thats the only truths and myths i got..the rest are still myths..The government is quiet on this..GST is technically postponed "indefinitely"...The Customs officer in the GST department doesnt know anything yet..(yes they have a specific department!)

Some say the announcement will 18 months before the actual implementation..some say it will coincide with the school holidays..and the common one is GST will be implemented after the elections because our PM will probably lose his job if he implements beforehand..Yes it seems zewt knows as much as i do..we dont have any insider news.. =(

I am suddenly thinking that this will be one dead boring i think i better start to cut things short..we are currently pay service tax..even in Mamaks like Nasi Kandar as it is not a new tax but a replacement tax..there should not be any difference!..So there you go..GST in the view of a food far as i m concerned..i should not be paying more then i am currently am..

So i shall end the entry with a laugh..Facts about VAT aka GST we all never knew..

1. VAT was invented by Maurice Laure, a French civil servant, in 1954.
2. In Sweden VAT is called Moms, in Italy Iva and in France TVA.
3. VAT is a tax on consumer expenditure, and businesses do not bear the final cost. Firms are able to charge VAT on goods and services they sell and recover it on purchases.
4. There are three positive rates of VAT. The standard 17.5 per cent is charged on most goods and services; the reduced rate of 5 per cent applies to domestic fuel, sanitary products and children’s car seats. The zero rate is on items such as food, books and children’s clothing.
5. VAT costs only 2/3 of a penny to collect each £1.
6. The UK is the only EU country not to charge VAT on food.
7. If you buy eggs to eat, they are zero rated as a foodstuff. If you buy them rotten for throwing, they attract VAT.
8. The United States has never introduced VAT. It relies on sales taxes which vary between states.
9. Taking part in sport when provided by a non-profit-making body is exempt from VAT. In 1996, however, a tribunal ruled pigeon fanciers should pay VAT as it was the pigeon getting the exercise.
10. In Luxembourg, the lack of a crematorium means corpses are sent across the border where the French charge 17 per cent VAT. When mourners return, they are charged a further 8 per cent, as human ashes are "material processed by a foreign firm and re-imported as a finished product".
11. The highest VAT rate in Europe is 37 per cent charged by Italy on "foreign vintage sparkling wine" ie champagne, but they dare not call it that. If they did, it would be an illegal discriminatory measure specifically aimed against the French.
12. It is widely believed food is zero rated, but a quarter of all foodstuffs are subject to VAT, including bottled water and chocolate biscuits.
13. Books are zero rated because they are deemed for the public good - so are pornographic magazines.
14. Former prime minister Edward Heath once said: "You know what Margaret Thatcher did in her first Budget? She introduced VAT on yachts. It ruined my retirement."
15. Eat a sandwich standing up on a train and you will pay VAT, but not on a business class lunch on a plane - considered part of the journey.
16. Jazzman Max Collie argued he should not have to pay tax on his hair transplant because it was integral to his act. He won.
17. Bull semen is liable to VAT but hiring a bull to service a cow is tax free.
18. Even Christmas kisses are not tax free. Mistletoe was added to the VAT list in 1995.

And the last one..a nice short joke regarding the mentality of Customs..

Five Brit's in an Audi Quattro arrive at the Eurotunnel Terminal in Calais. The English Customs Officer stops them. "It's illegal to put 5 people in a Quattro."
"Oh, no Officer, Quattro is just the name of the vehicle. Look at the papers, this car is designed to carry 5 people."
"You can't pull that one on me," replies the English Customs Officer.
"Quattro means 4!"
"Oh, you are so stupid!. Call your supervisor over!
"He can't come, he's busy with the 2 guys in the Fiat Uno."


zewt said...

hah... you made my entry sounds... not so true anymore eh?

bu then again... my point was... the traders will take this as an opportunity to raise their prices... it's true... petrol price increase 10 cents... one char siew pao also increase 10 cents.

Someone who is constantly craving said...

thus the "should be" no increase..yes i get you..the fact that gst is lets say 5%..they probably increase their prices by 10% and say..sorry la boss..semua cost saya sudah increase la bcoz of GST..but then u just screw them and say..oi..your chicken no GST le..don bluff me..haha

lilia edlina said...

hmm too technical for a transfer pricing expertise (sort of) like me. so i reallllly have no comment. heh.

boo_licious said...

er, you work in a tax dept?

Someone who is constantly craving said...

haha..yes i do...i wish i could be a full time food reviewer..anyone out there wants to employ me?

lilia edlina said...

typo *transfer pricing expert not expertise.

anyway, to add in, as the name suggests 'someone who is constantly craving', so cravings can be for anything ma. doesnt always have to be for food. so there's nothing wrong sekali sekala do review on other non-food stuff also.

keep it up! :)