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Goods and Services Tax (GST) which is also known as Value Added Tax (VAT) in many countries is a multi-stage consumption tax on goods and services. The worldwide trend has been for the introduction of a multi-stage GST system. Today, almost 90% of the world's populations live in countries with GST, including China, Indonesia, Thailand, Singapore and India.

GST was proposed to replace the current consumption tax i.e. the sales and service tax (SST). The introduction of GST is part of the Government's tax reform programme to enhance the efficiency and effectiveness of the existing taxation system.

It is important to replace the existing SST in order to eliminate its inherent weaknesses such as cascading and compounding effects, transfer pricing and value shifting, no complete relief on goods exported, discourage vertical integration, administrative bureaucratic red tape, classification issues, etc.

For more information on GST, visit the Royal Malaysian Customs Department website at http://gst.customs.gov.my