Friday, April 17, 2015

Better to have form over substance?

In our hurry to show the outside world of our progress and development, we seem to prefer forms over substance. Tallest twin towers (Petronas Twin Towers); brand new grandiose capital in Putrajaya; expansive (land area bigger than White House) as well as expensive (even renovation costs could have built a decent one) official residences for PM and DPM (which could put 10 Downing Street to shame); impressive university campuses (modelled after Harvard); and so on.

We tend to accept news in printed form as truth (we often hear of 'It was in the newspapers') while those in digital forms as lies (though justified by some blatant examples too).

With the implementation of GST, there are numerous complaints daily from registered businesses as well as the public affected by it. With hindsight, it would seem the ministry did not even compile a list comprehensive enough for practical use: to identify exempt, zero-rated or standard-rated items.

Many new accounting systems claiming to be GST compliant are being offered, some without proper designs nor adequate supporting services. Already, there are complaints about some not usable by some businesses, which is not surprising because some unique businesses require tailor-made software. Or, there are some opportunists who wrote simple programs to cheat the public because they are simply not prepared to follow-up on problems. To give some the benefit of the doubt, there will be genuine software providers who just could not cope with the rush of initial complaints at the same time.

If not mistaken, a minister mentioned that a GST bill should be printed and not hand-written. I know of the example being shared in the internet which shows a ridiculous bill with illegibly scribbled details. But I am more concerned about small businesses which cannot afford or simply do not need a computerised system. Their revenues might exceed the threshold Rm500,000 a year, but it could be just a few items with high values. All it needs to be GST compliant is to be able to show their record books and able to calculate from them, the net figure between input and output GST periodically, so that the correct amount can be remitted to or refunded from Customs. In the 70s, when UK already had VAT (similar to GST), many small businesses relied on manual books of accounts which were acceptable to HM Customs & Excise.

Because of our preoccupation with and preference for printed forms, we might not see the wood from the trees. There could be establishments with impressive looking bills having the required GST registration numbers and showing properly calculated GST amounts, but falsifying amounts remitted to Customs. While some small businesses might be forced to buy expensive GST-compliant software or cheap system but which requires additional recurring costs in its continual use.
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