Sunday, May 25, 2014

Impact of Malaysia GST to Investors

Malaysia is expected to implement Goods and Services Tax (GST) on 1 April 2015 at the initial rate of 6%. The cost of a lot of things will be affected, including investment vehicles and products.

I believe nowadays everybody deals with banks. How the GST will impact our deposit, interest, loan, credit card, bank charges, etc.? Refer to the table below.

The next of our concerns is our investment in the local stock market and unit trust funds. The brokerage and clearing fee will be affected, but not the stamp duty. The impact on unit trust funds is more severe, so your fund manager has to work much more harder to bring you a good profit after minus all the charges and fees and now the additional GST imposed.


How about insurance policies? Your premium paid to life and education policies will not be imposed with GST, but it seems that most if not all other insurance policies are affected. Note that general insurance products including car insurance, house/fire insurance, accident insurance, etc. will be affected too.


For those who invest in precious metals (gold, silver), jewellery, collectibles, etc., if you trade with the physical product, you are affected.

If you trade with a gold/silver investment account with a bank without touching on the physical product, you are probably not affected.


A 6% GST of PAMP Suisse 100g gold bar selling at RM14,000 will be RM840, quite a big sum.

5 comments:

Mr Loso said... Reply To This Comment

Is that means our brokerage fee will add up with GST of 6%? That's really huge figure when every RM100 trade will cost RM6 of GST! OMG.

Jonas said... Reply To This Comment

Or perhaps it is calculated like this?

RM12 brokerage * 6% = RM0.72
Total brokerage = RM12.72

Voyager8 said... Reply To This Comment

@Mr Loso

If your trade value is RM10,000 at brokerage rate of 0.1%, then:

Brokerage = RM10,000 x 0.1% = RM10
GST = RM10 x 6% = RM0.60


Voyager8 said... Reply To This Comment

@Jonas

Yes. Same to clearing fee.

frans said... Reply To This Comment

GST is tax for DELIVERY goods and services. The zero-tax items mentioned in the tables are subject to income tax if applicable!!

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