英语论文网

sessment based on tax return practices, the difficulties in establishing efficient VAT control systems, a large share of shadow economy and tax fraud.' These concerns are all relevant to the issues currently experienced by the Malaysian Government.

Malaysia aims to replace its current sales tax and services tax of 10% and 5% respectively with a proposed GST rate of 4%. The ITD (2005) paper has commented on how 'the choice between a single-rate and a multiple-rate VAT depends mainly on balancing tax administration considerations, favouring a single rate, against the availability of other instruments better targeted to achieve distributional objectives, the relative absence of which tends to favour further rate differentiation'. However, according to CPA Australia, 'the GST rate should provide a beneficial outcome for the consumer', since GST will be levied at a multi-rate. The problem with this is that it may cause an impending divide between the rich and the poor. A lower tax rate on necessities and on luxuries will benefit the rich due to the fact that their total spending power will increase. However, Edmiston & Bird (2004) remarked how imposing a higher rate on luxury goods is not a productive method of increasing progressive fiscal system. Alebel (2009) has discussed how the Governments choice between a single-rate and a multiple-rate GST will affect its citizens. This means the governments proposed use of a single tax rate will generate more revenue and lower its administrative costs which would make the transition a lot easier. However, this will also impact negatively on the poorest.

Nevertheless, before the Government can even think about rolling out GST across the country, it must first look at the capabilities of its own infrastructure and the businesses that operate within Malaysia. It will not be a simple approach of adopting a generic accounting system because the government and businesses will have to accommodate for the GST laws and the nature of its business operations within Malaysia. According to Alebel (2009), the implementation and enforcement of GST will need administrators to have an efficient computerization system which will be able to carry out the task of checking and auditing the revenues from GST. Moreover, Alebel (2009) continued by stating how administrators must also be well trained in order to operate the computerized systems and on top of that possess extensive knowledge about GST in order to provide the public with the extra guidance it will require. In order to achieve this, the government will be required to invest large sums of capital into its existing infrastructure while also providing extensive education programs for the public. What needs to be identified is whether the Government is capable of educating taxpayers and enforcing business compliance with the new tax system.

As it stands, with regards to the attitude of Malaysian Citizens towards tax is; there is a large degree of non-compliance. As of 2005, the number of tax defaulters has risen from 25,160 in 2003 to 239,666 (Sia, 2008). This is a direct result of the Governments lack of enforcement and education for taxpayers. The existence of a relationship between education and tax compliance is supported by Kasipillar (2003) who concluded that if 'taxpayers had adequate tax knowledge, there would be minimal unintentional non-compliance'. Furthermore, Singh (2007) and Alebel (2009) have also com