Masco Corporations Strategic Planning Case Study

Masco Corporations Strategic Planning - Case Study Example The company has successfully developed its product lines for faucets by establishing faucet manufacturing units with advanced business model. In 1986, Masco Corporation developed its vision statement, which reflected its desire to become "Procter & Gamble of consumer durables" (Harvard Business School, 1998). The very vision statement has propelled the company to diversify its business into other consumer durable goods. Alongside, the company has also extended its tentacles to enter the market of oil-field equipments, drilling tools and transport related products like gear shift levers, engine exhaust system etc. The company has even restructured its organizational structure and implemented other methods to reduce its overall cost of production. However, the primary obligation of the company is to enhance its research & development, and manufacturing ability so that the above stated concerns are addressed to. For acquiring technological breakthrough, the company has entered into contracts with research firms like MTI. For optimising the productivity of each manufacturing division, the company has developed formal organiza tional chart aimed at facilitating communication and exchange. In order to reduce the cost associated with its R&D various cost reduction programs were undertaken. This coupled with innovative working procedures and methodologies have helped the company to produce high quality innovative products at a lower cost. Masco's resources The resources of Masco Corporation can be categorized into two types i.e. tangible and intangible. Since its inception, the company has been constructing its manufacturing units in numerous locations that produce a wide range of consumer durable products. This attest the fact that the company is well equipped with necessary plants, machineries, inventories etc. Its intangible resources include its expertise in metalworking. The company has a sound experience in technology, driven by proficient technicians that constantly strive to design and create new products. With its existing resources, Masco can easily enter the $14 billion household furniture industry. The company has already curved out a niche in the mind of its customers by virtue of its quality products. Hence it is expected that the products manufactured by the company will find a ready acceptance. Another vital resource of the company is its high profitability. The company can use its retain-earnings for investments purposes in the furniture industry. Masco's Strategy for entering the furniture industry Before entering the furniture industry, Masco Corporation must implement only those strategies that match with the organizational structure and compatibility. It is of paramount importance for the company to analyze the internal and external factors. The internal factors include the strength and weaknesses of the country whereas the external factors include Porter's five forces of competition and macro-environmental factors like economy, demography, legal etc. Only when the company has successfully scanned these factors, it will develop its strategy focusing on particular areas.

Promotion of Liberal values by states Essay Example | Topics and Well Written Essays - 1500 words

Promotion of Liberal values by states - Essay Example Further it also presents the idea that the spread of liberalism will not necessarily result in shape of complete peace and prosperity in the world. In order to understand the prescribed role of the liberal states by the Liberalism theory it is important to understand the theory. "Liberalism is an ideology, philosophy, and political tradition that holds liberty as the primary political value. Broadly speaking, liberalism seeks a society characterized by freedom of thought for individuals, limitations on power, especially of government and religion, the rule of law, the free exchange of ideas, a market economy that supports relatively free private enterprise, and a transparent system of government in which the rights of minorities are guaranteed. In modern society, liberals favor a liberal democracy with open and fair elections, where all citizens have equal rights by law and an equal opportunity to succeed." (Wikipedia, 2006) The essential characteristic of the liberal theory of the state is the doctrine of jurisdiction. The liberalism theory emphasizes on the limited area of power and authority for the state. Liberalism provides specified boundaries to the state beyond which the state cannot trespass. The principle of the limited power of state is the characteristic, which signifies the theory of Liberalism from Socialism in which the power of state is unlimited and Anarchists, according to whom the state does not have any significance. According to the neo socialist theory the most important factor is the economic efficiency rather than that of individual liberty and limited government. In order to undertake a discussion of the extent to which the use of power in the spreading the Liberal values is justified we will analyze the principles of Liberalism. The first and the foremost important principle of liberal theory are that the state is not superior to all the institutions. In fact state is also a social institution as other social institutions. All the institutions related to the specified field have relatively more power concerning the field as compare to other institutions. State has its own limitations and boundaries. It has to act in those boundaries. (Cooray) War has remained an issue of concern for most of the countries and nations. The formation of the international institutions such as League of Nations and the UN is the part of efforts of the nations towards establishing peace in the world. But still the notion of war is present in shape of the process of fighting terrorism and intervention to establish democracies. In case of the attack of U.S and its allies at Iraq and the refusal of the United States to follow the suggestion of United Nations to resolve the matter through peaceful talks, denies the first role of the superiority of the institutions on the state. United States used her economic dominance and military superiority in the world to make all the countries, including its enemies and allies to support the decision of war against Iraq through using force. "The second principle of the liberal theory of the state is that the state ought to respect the fault principle." (Cooray) According to the fault principle the state cannot punish an individual or cause him any harm with

The Treaty of Waitangi and Healthcare

The Treaty of Waitangi and Healthcare Realities and Maori Models of Health New Zealanders has major ethnicities than any other parts of the world, comprising over 213 ethnic groups. Five major ethnic groups in New Zealand comprise New Zealand European, Maori, Chinese, Samoan and Indian (NZ Herald, 2013). And of all ethnic groups, Maori has been documented as having the poorest health status in New Zealand even after the regulation of factors like income, residence and education. This health status is the result from their negative experiences from colonization processes that resulted in the loss of their cultural beliefs, practices and even their Maori language. As Ramsden, Irihapiti has stated: Maori have until recently been passive consumers of a health service that they have had little input into. As yet Maori have little control over funding, policy and delivery of health service in the State sector. Many Maori would argue that this situation is in contravention of the promise of the second article to protect the â€Å"unqualified exercise of Maori chieftainship†¦over lands, villages, and all their treasures†. [1] Tino rangatiratanga guarantee has not been realised while Maori cannot gain autonomy in health service and become accountable to Maori.[2] The Ministry of Health documents [3]has revealed the seriousness of the matter and the need to address the inequalities and disparities of health as what Hon. Annette King has stated: The Government has acknowledged the importance of prioritizing Maori health gain and development by identifying a need to reduce and eventually eliminate health inequalities that negatively affect Maori.[4] As health care providers, it is our utmost responsibility to respond to Maori’s health issues in respect to the diversity of worldviews that may exist in between us. To fully understand Maori health promotion, it is best to examine these key models that have been developed and currently used. Maori view health in a holistic way. Each of these models is interlinked and highlights the links in between the physical, spiritual, individual and most importantly, the family. Te Whare Tapa Wha Te Whare Tapa Wha is also known as â€Å"four cornerstones or sides of Maori health†. These four cornerstones includes the: Taha tinana or Physical Health – from the word itself, it refers to the body and its physical manifestation. Taha Wairua or Spiritual Health – Maori believed that the spiritual essence of the individual is their life force and therefore is essential in the identification of an individual as a whole. Taha whanau or Family Health – it details the importance of family on the well-being of the individual. Taha hinengaro or Mental Health – refers to the relevance of the mind and the ability to communicate, think and feel. This model expresses the relevance of balance that if one of these elements fails can lead to illness. It was developed by Mason Durie in 1982 because the spiritual element of health was discarded which has become an important in the prevailing health models. Te Pae Mahutonga or Southern Cross Star Constellation This model brings together the elements of modern Maori health promotion. These key elements highlight the linkages in between Mauriora (cultural identity), Waiora (physical environment), Toiora (healthy lifestyles) and Te Oranga (Participation in society). The two pointers symbolize NgÄ  Manukura(community leadership) andTe Mana Whakahaere(autonomy) which depicts the resources needed to achieve those outcomes. It has been currently used around New Zealand to create a positive change regardless of ethnicities or culture. Te Wheke Te Wheke or the octopus depicts family health. The octopus head represent te whanau (the family), octopus eyes as waiora (family and individual’s total well-being) and the tentacles representing specific dimension of health which are interwoven representing closeness of these tentacles. Maori acknowledges importance of interconnectedness in between the mind, spirit, whanau and physical and has always been even after the introduction of Western medicine. He Po Oranga Tangata Whenua This model has been developed to ensure the traditional tangata whenua (people of the land) values, knowledge and institutions are recognized as key indicators of toiora: optimum health and well-being. It attempts to make a wider connection between wider health and social determinants like housing, employment, education, resources and language. This model is now being applied in the Bay of Plenty District Health Board. All of these models will help shed light on Maori’s views of health and well-being in the hope of greater appreciation to them and be put into works by the professionals working in the health sector. MANAAKITANGA Loosely translated as â€Å"hospitality†, manaakitanga plays an integral part in Maori society. It is derived from the word â€Å"mana† or the person’s ability to care. It derives respect that is earned and cannot be forced to any individual. Being hospitable, looking after visitors and caring for them regardless of their status is of great importance to them. But manaakitanga has a much broader definition than just a word or direct translation. It can be broken down into 3 parts: mana-a-ki which means â€Å"power of the word† which motions them to be expressive and articulate in welcoming visitors. There is another explanation with the words â€Å"mana† or prestige, â€Å"ki te tangata† or to the people – which gives the importance of mana that contains the integrity, prestige and power of guests. Manaakitanga not only encompasses hospitality but also on mutual respect. It acknowledges others’ mana as having equal or greater th an their own which can be seen in the form of love, generosity, as well as hospitality. They also believed that in any gathering, small than it may seem, it should be remembered with gratitude and affection. They welcome settlers with open arms as they often trade and give foods to them. Some of them brought individuals into their marae or meeting place where they become members of whanau/family, hapu/sub-tribe and iwi/tribe. Manaakitanga, in short sense, is about cultivating relationships, looking after one another and being careful as to how others are treated regardless of their status in the society. It is applicable not only to the Maori but also in any ethnic group. In any health care setting, it is important that we all treat each other with respect. It can boost one’s esteem knowing you are valued. In this way will we be able to build rapport and partnership not only to the patients but as well as their families, thereby, improve the health status of not only the Maori but also to the entire ethnic group. References Manning, B. (2013, December 11). Census 2013: More ethnicities than the worlds countries National NZ Herald News. Retrieved from http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1objectid=11170288 Media Resources. (n.d.). Manaakitanga – unique New Zealand hospitality > New Zealand. Retrieved from http://www.newzealand.com/travel/en/media/features/maori-culture/maori-culture_manaakitanga-hospitality.cfm Nursing Council of New Zealand. (2002, March). Guidelines for Cultural Safety, the Treaty of Waitangi, and Maori health in Nursing and Midwifery Education and Practice. Retrieved from http://www.sportsouthland.co.nz/files/docs/culturalsafety nurses.pdf Whanau Ora News. (2013, November 11). MÄ ori Models of Health Wellbeing | Te Arawa WhÄ nau Ora Collective. Retrieved from http://tearawawhanauora.org.nz/2013/11/maori-models-of-health-wellbeing/ [1] Kawharu, I. (Ed). (1989). Waitangi: Maori and Pakeha perspectives of the Treaty of Waitangi. Auckland, NZ: Oxford University Press. 2 Ramsden, I. (1996). The Treaty of Waitangi and cultural safety: The role of the Treaty in nursing and  midwifery education in Aotearoa. In Nursing Council of New Zealand, Guidelines for cultural safety in  nursing and midwifery education. Wellington, NZ: NCNZ. [2] [3] Social Inequalities in Health, New Zealand (1999), the New Zealand Health Strategy (December  2000) and Priorities for Maori and Pacific Health: Evidence from epidemiology (2001) [4] King, A. (2001). New Zealand Health Strategy. Wellington, NZ, Ministry of Health. p.18

America Needs an Alternative to Prison :: Argument Argumentative

America Needs an Alternative to Prison America's prisons have been called "graduate schools for crime." It stands to reason: Take a group of people, strip them of possessions and privacy, expose them to constant threats of violence, overcrowd their cell- block, deprive them of meaningful work, and the result is an embittered underclass more intent on getting even with society than contributing to it. Prisons take the nonviolent offender and make him live by violence. They take the nonviolent offender and make him a hardened killer. America has to wake up and realize that the current structure of our penal system is failing terribly. The government has to devise new ways to punish the guilty, and still manage to keep American citizens satisfied that our prison system is still effective. Americans pay a great deal for prisons to fail so badly. Like all big government solutions, they are expensive. In the course of my studies dealing with the criminal justice system, I have learned that the government spends approximately eighty-thousand dollars to build one cell, and $28,000 per year to keep a prisoner locked up. That's about the same as the cost of sending a student to Harvard. Because of overcrowding, it is estimated that more than ten-billion dollars in construction is needed to create sufficient space for just the current prison population. The plain truth is that the very nature of prison, no matter how humane society attempts to make it, produces an environment that is inevitably devastating to its residents. Even if their release is delayed by longer sentences, those residents inevitably return to damage the community, and we are paying top dollar to make this possible. Why should tax payers be forced to pay amounts to keep nonviolent criminals sitting in prison cells where they become bitter and more likely to repeat their offenses when they are released? Instead, why not put them to work outside prison where they could pay back the victims of their crimes? The government should initiate work programs; where the criminal is given a job and must relinquish his or her earnings to the victim of their crime until the mental and physical damages of their victims are sufficed. A court will determine how much money the criminal will have to pay for his restitution costs, and what job the criminal will have to do to pay back that restitution. The most obvious benefit of this approach is that it takes care of the victim, the forgotten person in the current system.

Child’s behavior Essay

Action speaks louder than words, the adage goes. The same applies for child rearing, specifically in setting a child’s behavior. Verbal admonitions, advices, and instructions are important to make it obvious to the child what the parent expects him to follow and do. Words specifically define the desired behavior parents want from their children. However, children are easily distracted, especially with long sentences, so that while talking to them, their attention or their mind strays from grasping every word thus deterring understanding. Another, words oftentimes have ambiguous meanings to the child so that the latter might not â€Å"get it† in spite of having been told. Actions leave more imprints into a child’s memory compared to words because actions explain more than words could express. Usually, when a parent verbalizes an instruction, he accompanies it with action. This is because the more senses are involved during the comprehension process, the better and more lasting the comprehension. Actions involve more senses. They engage the child more into the character-building process because they do not just hear; they also see it in action through their parents. Furthermore, when the parents’ behavior contradicts with what they say, it confuses the child and might diminish the parent’s trustworthiness and authority in the eyes of the child. Children imitate grown-ups a lot during their formative years since they still have to develop their own individual personalities and judgments. Children tend to think that whatever their parents do are always the right things. After all, in their yet young lives, parents have been doing a lot of things for them, feeding them, taking care of them, dressing them, etc. By doing the right and proper actions, therefore, the child would confidently follow—with this knowledge that whatever their parents might be doing could be right.

Automobile †Opel Essay

Introduction – A museum is an institution that cares for (conserves) a collection of artefacts and other objects of scienti$c, artistic, cultural, or historical importance and makes them available for public viewing through exhibits that may be permanent or temporary. Museums have varying aims, ranging from serving researchers and specialists to serving the general public. Purpose of study – ?A car represents status. A car is symbol of power. There are many car enthusiast’s in our country. ?There are many rich people that own a antique or a latest high technology car. ? And on other had there are many people who cannot a/ord such an expensive car but have a great interest in them. ?Most of the car museums we see holds only the vintage cars. ?Thus there is a need felt to provide a new building typology which can o/er a range of cars to view, from vintage to the modern, for all the car enthusiast’s to look out. SOURABH SHALGAR FOURTH YEAR (CM) ROLL NO:27 1 An Automobile Museum – Same as an ordinary museum, an Automobile museum is a museum where a range to cars are for display for the people to view. Purpose of an Automobile Museum – ?The main purpose is to provide a stage where people can display there cars. ?Giving people an opportunity to see a wide range of cars under one roof. ?Along with that providing ancillary activities such as a track for drag racing , where various events can be performed. ?Helping the car companies to display there cars which can help them advertising there brand, and giving a chance to people to compare between to companies. ?Along with that to provide all the amenities to ensure the comfort of the visitor. ?To make the Museum a tourist attraction so that it will be a revenue generation place for the city. Aim – ?Attract people to visit the museum. SOURABH SHALGAR FOURTH YEAR (CM) ROLL NO:27 2? To provide display for a variety of cars and companies. ?To knowledge people about history of the car companies. ?To make the museum a tourist attraction point. ?To entertain the visitors. Design Strategies – To achieve the aims , the components which can be used in design are ; ?Granduarness should be created by the structure which can act as the landmark of that place. ?Ambience should be created such that visitors should enjoy. ?Display areas created should keep the Status and luxury of the car companies. ?Metal Innovative Architecture must be used to give the structure the iconic look. SOURABH SHALGAR FOURTH YEAR (CM) ROLL NO:27 3.

Animal Cells, Tissues, Organs and Organ Systems

Animal Cells, Tissues, Organs and Organ Systems The building blocks of all matter, atoms and molecules, form the substrate for the increasingly complex chemicals and structures that make up living organisms. For example, simple molecules like sugars and acids combine to form more complex macromolecules, such as lipids and proteins, which in turn are the building blocks for the membranes and organelles that make up living cells. In order of increasing complexity, here are the basic structural elements that, taken together, make up any given animal: Basic Structural Elements atomssimple moleculesmacromoleculesmembranesorganellescellstissuesorgansorgan systemsanimal The cell, toward the middle of this list, is the basic unit of life. It is within the cell that the chemical reactions necessary for metabolism and reproduction take  place. There are two basic kinds of cells, prokaryotic cells (single-celled structures that do not contain a nucleus) and eukaryotic cells (cells that contain a membranous nucleus and organelles that perform specialized functions). Animals are composed exclusively of eukaryotic cells, though the bacteria that populate their intestinal tracts (and other parts of their bodies) are prokaryotic. Eukaryotic cells have the following basic components: A plasma membrane that forms the outermost boundary layer of the cell, separating the cells internal processes from the external environment.Cytoplasm, which consists of the semifluid substance called cytosol as well as various organelles.A well-demarcated nucleus, which contains the animals chromosomes inside a nuclear membrane. Organ Systems During the development of an animal, eukaryotic cells differentiate so they can perform specific functions. Groups of cells with similar specializations, and which perform a common function, are referred to as tissues. Organs (examples of which include lungs, kidneys, hearts, and spleens) are groups of several tissues that function together.  Organ systems are groups of organs that work together to perform a specific function; examples include skeletal, muscular, nervous, digestive, respiratory, reproductive, endocrine, circulatory, and urinary systems.

Defining Permafrost

Defining Permafrost Permafrost is any soil or rock that remains frozen (below 32 F) throughout the year. For a soil to be considered permafrost, it must be frozen for at least two consecutive years or longer. Permafrost can be found in cold climates where the mean annual temperature is less than the freezing point of water. Such climates are found near the North and South poles and in some alpine regions. Soils in Warmer Temperatures Some soils in areas that experience warmer temperatures thaw for a short time during warmer months. The thawing is restricted to the top layer of soil and a permafrost layer remains frozen several inches below the surface. In such areas, the top layer of soil (known as the active layer) warms up enough to enable plants to grow during the summer. The permafrost that lies below the active layer traps water close to the soils surface, making it quite soggy. The permafrost ensures a cool soil temperature, slow plant growth, and slow decomposition. Permafrost Habitats Several soil formations are associated with permafrost habitats. These include polygons, pintos, solifluction, and thermokarst slumping. Polygon soil formations are tundra soils that form geometric shapes (or polygons) and are most noticeable from the air. The polygons form as the soil contracts, cracks, and collects water trapped by the permafrost layer. Pingo Soil Pingo soil formations form when the permafrost layer traps a large amount of water in the soil. When the water freezes, it expands and pushes the saturated earth upward into a large mound or pingo. Solifluction Solifluction is a soil formation process that occurs when thawed soils slide down a slope over the permafrost layer. When this happens, the soils form rippled, wave patterns. When Thermokarst Slumping Occurs Thermokarst slumping occurs in areas that have been cleared of vegetation, usually due to human disturbance and land use. Such disturbance leads to the melting of the permafrost layer and as a result the ground collapses or slumps.

PrepScholar Works Well for Top Scorers

PrepScholar Works Well for Top Scorers SAT / ACT Prep Online Guides and Tips Wondering how to get the last few points that could get you into your dream school? PrepScholar has innovative and exclusive features that can be your best friends come test day. We Tailor Content to You Nothing is more frustrating for students than going through the motions of â€Å"learning† something they alreadyknow. The big classroom SAT and ACT prep courses, however, lump 100% of students into whatever groups sign up for that time and place, and â€Å"teach† them 100% of the same material in every single class. This is a recipe for disaster (and boredom!) for top scorers who don’t need to spend time learning the formula for the area of a triangle. So PrepScholar tests you at the start of the course. Then, based on your performance on questions that test each individual skill, we give you a lesson at the correct level for your scoreif you answer almost every question correctly, you’re going to get all Advanced Lessons and Advanced or higher level questions. Obviously if you have no trouble with easier questions, you don’t need to practice them, and we understand that. We Give You Strategies That Can Make the Difference Top-quality test content and skill analysis is only part of the package, however. Some of PrepScholar’s most innovative lessons are Strategy Lessons, each of which focuses on a specific aspect of understanding and mastering the SAT and ACT. These are also split up into multiple skill levels, the highest of which includes the lessons â€Å"Advanced: Writing the Essay† and â€Å"Getting a Top Score.† The bottom line is that jumping from 2000 to 2300 is different than jumping from 1200 to 1500, and we give you the tools to make the jump you need. Lower scoring students need to skip certain difficult questions, for example, and Top Scorers need to learn how to get those questionsby multiple methods. This is what our strategy lessons are designed to do. Specifically, we show you how to reduce careless mistakes, how to allocate your time precisely so you can answer every question with certainty, and how to approach the toughest questions in multiple ways. We Are 2400 Scorers As a cohort of perfect and 99th percentile scorers, we intimately understand the problems at the top. We have vast experience with all types of SAT and ACT prep, including traditional classroom prep, and have worked hard to avoid their mistakes. We’ve watched top scorers in classrooms get bored and miss the information that could actually help them; we know what it’s like to be one of those students. We also know the frustrations of irrelevant or unnecessary work, and eliminate it from your personalized course. Finally, our hardest questions are designed by SAT and ACT experts and easily match the difficulty of the hardest SAT and ACT questions, and we’re available to explain them if the explanations aren’t sufficient. And for the biggest boost to your score, consider PrepScholar Tutoring, the ultimate personalized companion to your SAT and ACT mastery. If you found this article interesting or helpful, please consider signing up to hear from us at right. Your information will never be shared or sold.

Application Letter Essay Example | Topics and Well Written Essays - 750 words

Application Letter - Essay Example They are also a new working opportunity where one gets to meet people in the field of one’s career, get references from them boosting your resume, and even get new contacts that will enrich your career by being mentors or guides to landing that dream job. Also, internship is a field opportunity to apply knowledge previously acquired in class in an actual real life setting. This is a worth proving process on an individual’s qualifications assessed by ability to perform the various tasks given. Internship also plays a major role in the building of an individual’s confidence. Many PLATT departments must provide compliance training to keep PLATT employees up to date with new and changing laws and regulations. These departments have turned to Information Services (IS) department to develop a solution for efficient and cost effective method of providing online training videos to a wide audience as well as small target audiences. In order to avoid silo solutions, IS plans to implement a solution that could in the future, integrate into a broader Learning Management System. I would like to apply for a job at CISCO because currently, many departments provide live presentations of compliance training material to educate employees on recent laws and regulations but lack enough and qualified people to do the work. I will ensure that to cover the entire PLATT staff, they must present this material by attending numerous meetings across three different sites. It is significant to note that conducting live training is not the good way of using departmental resources. In addition, the inaccurate trackings of resources have made it difficult to determine which staff members have not been covered. Further, not all researchers attend presentation meetings thus making it difficult train all PLATT staff. In order to achieve efficiency, it is important for PLATT to adopt a more efficient and effective method of training

Cold War and Decolonization Annotated Bibliography

Cold War and Decolonization - Annotated Bibliography Example The friendship was created through various supports in terms of manpower, materials, and aids. However, such countries are said to have received no return for their support. In fact, as noted in the article, communist expansion to third world countries was a problem as acted as an impediment to the democratization process. On the other hand, there is argument that communist association with third world countries was as a result of competition with America and West European Liberal Capitalist. Also, America is said to have dominated in the international realm during this period. Therefore, the decolonization process was seen as a better way of controlling America dominance. The author also notes that rivalry that existed between communist and America was based on political economy. Also, the rivalry is noted to have affected the new emerging states. The states were faced with a dilemma on which side to support. This is seen to have created a chance for social awakening in post-war

Theories of Just War Essay Example | Topics and Well Written Essays - 2000 words

Theories of Just War - Essay Example Keeping this in mind, people of this century need to look at the theories that have been recorded in history that regulate the forms of war that states are allowed to wage against any other state or community. The importance of this lies in the fact that it may be able to reduce or eliminate the casualties that occur in today’s world as a result of the wars that have become a regular feature of the political landscape of every continent on the world. It is ironic that even Antarctica is not exempt from being a site of war. The theories of war that exist in contemporary times have to be juxtaposed with those that were proposed by religious thinkers like Thomas Aquinas and St. Augustine. Any theory of war that needs to stand the test of time needs to fulfil the basic purpose of its establishment- the meting out of justice. In this context, it would be useful to look at the theories of justice that have been a part of human historical records. Prominent among these are the ones o f Plato and Aristotle. These two thinkers have had a profound effect upon the theories of justice that have come after them. ... The criteria that the state must follow to decide which person upon which it can confer citizenship and which one it cannot is one that may seem unjust to some at present. These were based on laws that were created during the times of Ancient Greece and they were done when Greece was one of the greatest powers in the earth. To restrict foreigners from entering the land and establishing their rights was one of the main concerns of the state. Aristotle’s arguments need to be seen in this light. When viewed in the light of the democratic societies that present observers are used to, Aristotle’s arguments that have a profound impact on the development of present conceptions of the sovereignty of a state may appear to be unjust to certain sections of the society. Seemingly unjust powers are granted to the state that would enable it to treat its citizens in an arbitrary manner. The state is also shown to be the ultimate reason for the existence of the citizen. This can be see n from the fact that Aristotle considers it to be of more importance for a person t be a good citizen than a good person. The goodness of a person is determined by the utility of his self to the state (Clayton). These theories of citizenship and justice can be extended to understand the powers that Aristotle may have envisaged for the state in relation to other states. The sovereignty of other states too, thus is not important, in the same way that the sovereignty of an individual is unimportant. In this context, all the actions of the state, including an unjust war may be justified and the arbitrary nature of the decisions of the state would ensure that dissent is not a part of the solutions that the citizens of a particular state may

The Role of the United Nations in Conflict Management During the Cold Research Proposal

The Role of the United Nations in Conflict Management During the Cold War Era - Research Proposal Example As the war progressed, it became reorganized and other countries joined resulting in a military that was made up of seventy million personnel who were drawn from different warring countries. Stevenson (2004) noted that this war was referred to as the first deadliest war in history and it resulted in the death of 9 million people. The second major World War to have occurred in the World’s history is the Second World War that took place between the periods of 1939 to 1945, and it involved two opposing alliances namely the Axis and the Allies, which comprised of over thirty different countries. This Second World War ended with the highest number of fatalities who were placed in the range of fifty to eighty-five million people and it was caused by more or less the same factors that also caused the Second World War. McMahon wrote that after the Second World War, there was great tension primarily between the Soviet Union and the United States, which lasted between the periods of 1947 to 1991. This war was characterized by high levels of tension between the two conflicting sides and there was also mutual suspicion among the two enemies. According to Friedman, the United States, and the Soviet Union, which at that time were regarded as the World’s superpowers were engaged in the Cold War mainly because of economic and political difference between the two countries, as the US was pro-democracy while the Soviet Union was pro-communism. This present research study will focus on the Cold War, which is referred to as â€Å"cold† because of the fact that there were no incidences of large-scale fighting. In particular, this research study will seek to investigate the role that the United Nations played in managing the conflict that was associated with the Cold War considering that it was simply formed after the Second World War on 24th October 1945 to foster international co-operation.

Use of Nature in The Immortalist and The Cherry Orchard Essay

Use of Nature in The Immortalist and The Cherry Orchard - Essay Example Tongues learnt to move after looking at those pre designed and meaningful metaphors (Oliver 1987). Nordquist and Whales (1998) expressed the importance of metaphors and similes in text writing and explained how they enrich the material and quality of text written. According to his point of view, the similes are used to express emotions and signs. The presence of similes makes reading material more clear and entertaining for the reader. And inculcating of new similes also shows that you have a greater command and insight of your subject. In the same way, metaphors are images and shapes of objects and contents of nature. A reader can find the meaning or the imagination of scenarios the writer had, in mind, while writing by looking at those shapes and images drawn. The Immoralist by Andre Paul Guide: By reading the novel Immoralist, the author’s passion towards nature can be recognized. The written material reflects not just the outer natural beauty of the world but also the inne r nature of human beings, their feelings, their desires to have what they want around and for them. The author represented these in the accounts of how Michel used nature to bear with his inner feelings and how he achieved peace. For instance, Guide included some symbols and figures into his texts that gave answers and solution to Michel’s dilemma, and to many other readers out there facing similar problem and feelings. The author gave a marvelous concept in his novel that if a person is lost in the valley of meaninglessness, if his life is gone for the fake uncontrollable desires, he can get his life back by the fruitful control of nature and by pursuing the beauty of nature in and around him. The metaphors that demonstrate this concept and reality can be seen and enjoyed in the part where Michel describe the irrigation system in Biskra and in the taming of the wild colt at â€Å"La Morinier†. The figure of the goat boy depicts the irrigation system. Now, this image i s a symbol of nature and refers to natural beauty of land and a natural process going on for a purpose. The inherent laws of nature do contain the excess of life going forces which may lead to destruction, depriving other trees of their existence as well. The incident written in part 2, in wild colt, illustrates the same truth with its related simile drawn. Where, the beautiful animal was declared useless and dangerous by servants and Michel asks another character named Charles to help him treat gently and quite by showing some respect for that animal. The image drawn at that situation was meant to be used in contrasting situations where absence of restraining and uncontrollable nature leads to corruption and destruction. In the case of metaphor of irrigation system in Biskra, described above, was a human effort that could assist in making the nature more productive. The palm tree images in part 1 related to Michel’s wife Marceline were depicting the concept that she was weak when she got ill after she came back from their honeymoon. She needed energy to live. She could not tolerate the excess of energy around her but also was in need of a moderate level of energy in her atmosphere. This is how the author Mr. Guide put life in his novels through metaphors and symbols and made his material famous among his readers. The Cherry Orchard by Anton Chekhov: The symbol of Cherry Orchard itself depicts the unstable political – socio environment and drastically changing traditions. Negative conditions usually

People hit family members because they can Essay

People hit family members because they can - Essay Example Consider a couple named Chet and Margorie that had been married for ten years. Oftentimes Chet is a very domineering husband and many times has hit and abused his wife because he believed she did not do an adequate job of cleaning the house. While it’s easy to consider that Chet is just a violent person, one must also consider what would occur if Chet had a janitor that did not properly clean his office. In these regards, it seems clear that Chet would not attack the janitor. While Chet’s exact motivations are not easily discernable, Jacobson (1998) indicates that spousal abuse is oftentimes linked to dysfunctional relationship patterns and modes of communication within the household. Markowitz (2000) also indicates that spousal abuse more readily occurs, or is deemed ‘acceptable’ as compared to public violence, as the abuser is able to rely on the abused person’s emotional or financial dependence to ensure they will not receive punishment. In these regards, the abused person is often unable to leave or inform the authorities about the abuse because they rely on the abuser for their survival. While the earlier instance considers spousal abuse, family abuse also occurs in other forms. Consider the instance of David and Marie.

Use of Nature in The Immortalist and The Cherry Orchard Essay

Use of Nature in The Immortalist and The Cherry Orchard - Essay Example Tongues learnt to move after looking at those pre designed and meaningful metaphors (Oliver 1987). Nordquist and Whales (1998) expressed the importance of metaphors and similes in text writing and explained how they enrich the material and quality of text written. According to his point of view, the similes are used to express emotions and signs. The presence of similes makes reading material more clear and entertaining for the reader. And inculcating of new similes also shows that you have a greater command and insight of your subject. In the same way, metaphors are images and shapes of objects and contents of nature. A reader can find the meaning or the imagination of scenarios the writer had, in mind, while writing by looking at those shapes and images drawn. The Immoralist by Andre Paul Guide: By reading the novel Immoralist, the author’s passion towards nature can be recognized. The written material reflects not just the outer natural beauty of the world but also the inne r nature of human beings, their feelings, their desires to have what they want around and for them. The author represented these in the accounts of how Michel used nature to bear with his inner feelings and how he achieved peace. For instance, Guide included some symbols and figures into his texts that gave answers and solution to Michel’s dilemma, and to many other readers out there facing similar problem and feelings. The author gave a marvelous concept in his novel that if a person is lost in the valley of meaninglessness, if his life is gone for the fake uncontrollable desires, he can get his life back by the fruitful control of nature and by pursuing the beauty of nature in and around him. The metaphors that demonstrate this concept and reality can be seen and enjoyed in the part where Michel describe the irrigation system in Biskra and in the taming of the wild colt at â€Å"La Morinier†. The figure of the goat boy depicts the irrigation system. Now, this image i s a symbol of nature and refers to natural beauty of land and a natural process going on for a purpose. The inherent laws of nature do contain the excess of life going forces which may lead to destruction, depriving other trees of their existence as well. The incident written in part 2, in wild colt, illustrates the same truth with its related simile drawn. Where, the beautiful animal was declared useless and dangerous by servants and Michel asks another character named Charles to help him treat gently and quite by showing some respect for that animal. The image drawn at that situation was meant to be used in contrasting situations where absence of restraining and uncontrollable nature leads to corruption and destruction. In the case of metaphor of irrigation system in Biskra, described above, was a human effort that could assist in making the nature more productive. The palm tree images in part 1 related to Michel’s wife Marceline were depicting the concept that she was weak when she got ill after she came back from their honeymoon. She needed energy to live. She could not tolerate the excess of energy around her but also was in need of a moderate level of energy in her atmosphere. This is how the author Mr. Guide put life in his novels through metaphors and symbols and made his material famous among his readers. The Cherry Orchard by Anton Chekhov: The symbol of Cherry Orchard itself depicts the unstable political – socio environment and drastically changing traditions. Negative conditions usually

Havaianas Advertisement Essay Example for Free

Havaianas Advertisement Essay This article is stating that these sandals fit all personalities and characters; no one is too cool for these sandals. In order to persuade the audience they obviously use attractive models to gain the reader’s attention. They then go on to dress the models in the clothing the words are describing. All in all they made a pretty cool looking ad that will definitely grab the attention of their audience, Cosmopolitan readers. The ad keeps one looking around the page so that the reader will see at the bottom where the name of the company and what they are selling is located. Havaianas is not necessarily implying that one benefits in any particular way by wearing their sandals, they are just trying to iterate that these sandals are or can be worn be anyone. Superhero’s, movie stars, and even tango enthusiasts would wear these at times, so they must have the style and comfort for all occasions. Havaianas might not make u better person, but it appears from the models that they are in a good mood and comfortable in there surrounding even though the house is getting destroyed. At first glance I thought the article was trying to make it seem one would be more popular for wearing Havaians, but then I realized they are trying to sell people on the products versatility, how it is a sandal for all occasions. After studying and trying to find the different meanings of the article I conclude that the implied claims are supported efficiently by the content of the ad. The words â€Å"and/or† are placed in the article twice; this helps the reader distinguish the proper meaning of the article and not assume that these are the people you can become by wearing them.

The Goods Service Tax In Malaysia

The Goods Service Tax In Malaysia IS THE INTRODUCTION OF THE GOODS SERVICE TAX (GST) IN MALAYSIA GOOD OR BAD? Chapter 1 1.0 INTRODUCTION. In the new global economy, more companies are operating cross border, and as such are faced with the need to deal effectively with many different taxes, often in many different countries, each with different rates, ruling and application. Coupled with this, the regulatory environment is increasingly challenging. The IMF has been trying to push for all countries to adopt the Goods Service Tax (GST), or also known in certain countries as Value Added Tax (VAT), so as to create a more level playing field amongst trading nations. Direct taxes have in the past been used to camouflage à ¢Ã¢â€š ¬Ã‹Å"protectionism policy of certain countries. High tariff on certain product like motorcar has prevented healthy competition amongst trading nations. The general populations of that country are left without a choice but to consume the local products, as imported products have become more expensive with the high tariff. Often, because of this, the local products tend to be inferior in quality as the re is no real incentive to compete. In the 2005 Budget, the Government of Malaysia announced that GST will be implemented on Jan 1 2007 to replace the current sales and service tax (SST). Following public outcry, on 22 February 2006 it announced a deferment to allow lead time to businesses for potential changes in processes, development of software and personnel training. The first reading of the GST Bill was tabled in December 2009 and the second and third reading is expected in April 2010. The Prime Minister recently announced that the increase in revenue expected from the introduction of GST will be used mainly to finance the hike in Civil Servants salary and to finance other infrastructure works for the benefit of the nation at large. Problem Statement Is GST really needed for Malaysia? If so, how does it affect the general public and the country as a whole? The aim of this paper is to discuss and bring to attention the problems which we might face with the implementation of the GST, or if we are to remain status quo with the SST. Chapter 2 Literature review The Ministry of Finance presented the following information to highlight on GST. It stated that it would be part of the overall tax reform to overcome the inherent weaknesses in the SST and to reduce the reliance on revenue from direct taxes and petroleum. GST is a more efficient and effective tax system as it is self policing and has an in-build cross checking features. It enhances tax compliance and deals with less bureaucracy. It is also a more stable source of revenue compared to income tax and less susceptible to economic downturn due to the consumption nature of the tax. The main types of taxes are direct and indirect taxes. Direct taxes are: Corporate Tax, Personal Income Tax, Real Property Gains Tax and Stamp duty whilst indirect taxes are Tariff (or Customs Duty), Excise Tax, SST (currently practiced in Malaysia) and GST. Contribution from petroleum revenue to total revenue increased from 29.1% (1990) to 40.1% (2008). The current high petroleum revenue is not sustainable as it is a depleting resource therefore and alternative source have to be sought. With the present average birth rate of 2.2, it is expected that by 2030, 12% of the population will be above 60 years old which almost double the current number. The working population paying taxes will therefore reduce, putting a greater burden on a smaller group of people. GST is a broad-based tax that distributes the burden of taxation among a larger section of the population based on consumption. GST preserve the incentive to work and encourages enterprise as it is not a progressive income tax. The tax rate does not increase according to income level; it is flat at the determined rate. It is levied at the production and distribution stages, thereby incorporating a self-policing mechanism that facilitates administration and makes it more difficult to avoid or evade. This further reduces the possibility of revenue loss through understatement of tax evasion. The GST model implemented in Malaysia is not expected to have cascading, or pyramiding, effect as the tax on a particular good depends upon its final value, and not the number of production and distribution channel it passes through. Furthermore, the output tax to be paid will be offset against the input tax, and there is no GST levied over GST. GST is expected to provide a more stable source of revenue as consumption is less affected by economic cycles compared to income tax. It can be an effective tax on the à ¢Ã¢â€š ¬Ã‹Å"shadow economy, as those involved would consume, and thus pay indirect taxes through GST. It is likely that those involved in such activities would buy luxury goods, which would be subjected to GST. The government is cutting its operating expenditure for 2010 by 13%. This shows it is aware of the growing deficit that has widened due to the stimulus package. Recently, Fitch rating agency has cut the rating of the ringgit, which may cause imported inflation if it depreciates, and the International Monetary Fund commented that the GST needs to be implemented urgently. Malaysias budget 2010 reports on GST; is that, it is currently at the final stage of completing the study on the implementation, where analysts are measuring the social impact of its presence in Malaysia. The Malaysian government said that it could be possible for them to implement this in the near future. Looking at Malaysia in a broader scale, GST will not only affect big businesses, but small and medium enterprises (SME) as well. Although there were nimble of past information saying that a food outlet can only charge GST if its annual turnover is above RM3 million (3,000,000 Ringgit Malaysia), the GST compliance requirements and thresholds has not been officially announced. If we were to take into account GSTs implementation into goods and services, we have to assume that it will happen to all stages of the supply chain; which means from the purchase of raw materials or start-up goods all the way to end-user (consumer ready) products available for sale. Ultimately in a product, GSTs charged to every level are passed on to the next person and ultimately, the consumer. A Tax Review Panel was formed in middle of 2005, and it has come out with a Discussion Paper intended for businesses to understand the basic administrative requirements and procedures when GST is implemented so that they know the impact of GST. Secondly, the Tax Review Panel invites the business community and other relevant organizations and associations to review the proposal in that paper. Thirdly, by having a public consultation, it provides an appropriate forum for both the public and private institutions to exchange views with members of the Tax Review Panel so as to understand the rationale behind the proposals initiated. The GST was supposed to be implemented in Malaysia in the year 2007; however the government has to defer the move due to critical reviews by certain quarters. After losing four States to the opposition, it has to tread on a careful path in order not to lose more public support. It cannot afford to make any more major mistake in the wake of its dismal performance in the last General Election. GST is generally known as a tax system which results in regressivity (i.e. people with less pay a greater share of their resources than those with more), in contrast with the ideal aim of progressivity which is generally sought when implementing a tax. It is sometimes argued that a GST system does not work in a poor region such as Africa, where most countries have heavy external debt burdens, malnutrition, civil wars and lack of food and medicines which often result in inhuman living conditions. Nevertheless, with the support of the IMF, VAT/GST systems were designed in many African countries to combat or at least alleviate the adverse effect of VAT/GST regressivity by having a list of exemptions and zero-ratings which apply (generally speaking) to basic foodstuffs and other basic necessities. GST is not always simple to administer, contrary to what the advocates of GST would want countries to believe during the transformation stage. Unless a proper GST administration, supported by modern technology and electronic communication systems can be implemented, GST administration will inevitably be costly for both the Revenue Authorities and the business sector. The output/input mechanism of the GST system, coupled with GST refunds, may provide the ideal opportunity for fraud where corrupt officials and unscrupulous businesses exploit weaknesses in the system. This again results in a defensive attitude from the Revenue Authorities, resulting in bad communication, cash flow and other GST cost. In 1992, a Free Trade Agreement (FTA) was signed which reduced import tariffs between ASEAN member countries. In the first three years of the FTA, exports amongst the ASEAN countries grew from US$43 billion to US$80 billion. In 1997, the leaders of ASEAN adopted the vision to build a stable, prosperous and highly competitive economic region, in which there is a free flow of goods, services and investments, a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities. The plan is to remove all tariffs for the six more developed countries by 2010 and for all countries by 2015. The summit also progressed the efforts to integrate ASEAN with the much larger economies of Asia- Pacific, specifically China, Japan, South Korea, India, Australia, and New Zealand. China signed a pact to introduce the worlds largest free trade zone by 2010, covering almost two billion people. Japan signed a similar agreement to take effect by 2012. India agreed to join in by 2011. Australia and New Zealand have agreed to talks starting next year to free up trade within a decade. The master plan is to have a free trade zone that can compete with the US and EU. In South East Asia, Malaysia remains one of the few countries yet to adopt the GST system, which would indirectly be in the way, if we want to be part of this master plan. In Malaysia, it was announced that essential goods and services will not be subjected to GST, but fears that GST will spark a chain reaction that will increase the prices of most non-controlled items should not be dismissed. We have seen numerous examples of when there is an increase in a certain commodity; it sparks a price rise in most goods and services. For example, when the petrol price increased to RM2.70, prices of most goods, foods and services were hiked. But after the petrol price dropped, there has not been a substantial correction in the prices of goods, food and services. The relevant ministries are powerless to mitigate the situation and curb the necessary inflation. A recent example is on the removal of the subsidy on white bread resulting in price increase of one loaf of bread by 20 to 30 cents. The Deputy Domestic Trade, Cooperative Consumer Affairs Minister can only comment that the price adjustment was not necessary, urge traders to practice corporate social responsibility and call on the consumers to execute their power in hand. All these statements will not effectively curb excessive profiteering and traders taking opportunity to increase the price of goods and service. The public would want to know how the government intends to avoid the similar predicament What is GST and how does it work? GST is a consumption tax charged on a wide range of domestic international products, goods and services. Its a broad-based tax imposed on every level of a product, from raw materials all the way to finished goods. The proposed implementation of GST will replace the current Malaysian service tax and sales tax. Broadly, GST works by offsetting GST paid on purchases (input tax) against GST due on sales or supplies made (output tax). This is referred to as the credit offset mechanism. The multi tier stages of tax helps to ensure that GST paid by businesses for purchases does not end up being a permanent cost. However, the consumer ultimately bears the burden of the tax. Conceptually, GST is imposed on the value added to goods or services by each separate processor in the production and distribution chain. This can be seen in the simple illustration below. GST to Government RM 4 + RM2 = RM6 (i.e. 4% x RM 100) i.e.4% x RM 150 = RM6 Output tax i.e. 4%x150 Less RM4 Input tax RM2 Net 4% is the assumed standard rate of GST. It is assumed that the entire output is taxable and all input taxes are creditable. FINAL CONSUMER Cost to consumer = RM 156 SUPPLIER Selling price = RM100 GST(4%) = RM 4 Total = RM 104 MANUFACTURER Cost = RM 100 Value added = RM 50 Total = RM 150 GST (4%) = RM 6 Total = RM 156 2.1 SOME CONCERN ABOUT THE INTRODUCTION OF GST. There were some concerns that Malaysians could suffer even more with the introduction of the Goods and Services Tax (GST). GST-driven inflation would be a calamity that the struggling lower-income group could do without. The GST Bill was tabled in Parliament at the end of the Budget sitting that ended on 17 December 2009. At its first reading, the bill was just mentioned, but there was no explanation of the bill or any debate. The second reading is when the bill is open for debate and proposed amendments. This may come as early as March 2010 for the GST Bill. Once approved, the new tax can be implemented as early as 2011. The table below lists the governments tax revenue for 2008 which contributed RM112.9 billion or 70 per cent of total government revenue. Government Tax Revenue in 2008 Personal Income Tax  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 15.0 bil Company Tax  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 37.7 bil Petroleum Tax  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 24.2 bil Export and import duties  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM  Ãƒâ€šÃ‚   5.4 bil Excise duties  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 10.7 bil Sales and Services Tax  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 11.7 bil As shown in the table, the biggest source of tax revenue is company tax, which at 26 per cent of declared profits, currently brings in RM37.7 billion into government coffers. Petroleum tax makes up the second biggest tax item while the tax levied on the 1.5 million individuals who are now currently paying personal income taxes in Malaysia makes up the third biggest. All these taxes are deemed progressive for they tax the richest individuals and the companies that are making profits. Progressive taxes do not burden the poorer sectors of society. Progressive taxes tend to equal out income differences between the rich and the poor in society. It was argued that regressive tax regimes, on the other hand, burden the poor. Sales taxes are generally regressive as they tax consumption and not income. But sales tax in Malaysia has different rates for different types of goods and the government can make them less regressive by levying sales taxes exclusively on good that are consumed by the richer sectors of society such as expensive cars, big houses, overseas travel, expensive restaurants and other luxury items. The Goods and Services Tax, however, is perceived to be even more regressive for it is levied at a flat rate on a very wide range of products including many items that the poorer people need to buy. It might lead to a rise in prices and would definitely hit the poorest the hardest.   As in most countries with the GST in place, a reduction of corporate tax and personal tax will follow suit. This then, is seen as the real reason that the GST is being brought in à ¢Ã¢â€š ¬Ã¢â‚¬Å" to make Malaysia more business friendlyà ¢Ã¢â€š ¬? by cutting corporate tax (which has already been reduced markedly from the 40 per cent level in 1988 to its current 26 per cent). 2.2 LACK OF INFORMATION AND CONFUSION ON GST. The piecemeal release of information is creating great concern among the people and in the business sector. For example; Will the authorities furnish an extensive list of item that will be charged GST, and what will be exempted? If a product, like rice or chicken is exempted, does the exemption apply across the board regardless of the form of the product? For example, is cooked rice or cut, frozen or marinated chicken also exempted? What is the difference between exempt and zero-rated GST? Will there be any reduction in personal and corporate tax? What changes will be made to the sales and service tax? There is a perception that as GST is a multistage tax, it would result in higher effective tax rate than 4%. As GST is very technical, most people are unaware how it will impact them. When will the GST rate be reviewed? Recent media statement on its impact did not improve opinion on the introduction of GST. It is reported that under the sales and services tax system, the burden on the poor is 2.38%, but under the GST it will be 2.17%. For the higher income group, the tax burden will be reduced from 13% to 2.74%, according to the Finance Ministry. The overall savings for households will be between RM14.52 and RM346.92 yearly. This clearly contradicts other statement from politicians, and the public perception, that the GST will be inflationary. But as no further details are provided on how the savings are arrived at, public sentiment remains negative on GST. CHAPTER 3 EXPECTED IMPACT OF GST 3.1 Impact on the people in the street. The public is generally concerned that the introduction of GST will hit their wallets directly. In an initial assessment, as the GST is expected to be lower than service tax, the bill for a restaurant meal will be 1% lower as the service tax rate is 5% and GST is 4%. For other services liable to service tax, a GST rate lower than service tax should result in a slight decrease in charges if the cost of the other components in providing the service remain the same. On goods that attract sales tax, the current rate seems higher than the proposed GST, hence there might be a reduction if there is no further adjustment. Current rates are as follows; à ¢Ã¢â€š ¬Ã‚ ¢ Fruits, certain foodstuff and building materials (5%) à ¢Ã¢â€š ¬Ã‚ ¢ General goods, including motor vehicle (10%) à ¢Ã¢â€š ¬Ã‚ ¢ Liquor and alcoholic drinks (20%) à ¢Ã¢â€š ¬Ã‚ ¢ Cigarette and cheroots (25%) For hawkers; even though they do not have a turnover of RM500,000 yearly, so are not required collect GST, the material procured, for example, noodles, fish balls, processed meat, chicken, equipments for the stall may be subjected to GST, resulting in price hike. But without detailed knowledge or mapping, or even information on the duties charged, the people are uncertain whether the prices of goods and services will remain stagnant, increase or decrease. 3.2 IMPACT ON BUSINESSES. The implementation of GST is expected to impact business in the following manner: Compliance costs are expected to be incurred as there is requirement to track the input tax and output tax to determine refund or tax to be submitted. Even though some Malaysian companies are already paying sales tax or service tax, there was no input tax to be monitored and accounted for to offset against output tax. Business process and procurement need to be mapped out, especially with respect to suppliers and promotional items. For example, a new car attract GST, but items provided for free during promotion like sports rims or a GPS system à ¢Ã¢â€š ¬Ã¢â‚¬Å" may not be eligible for an input tax claim. Likewise the corporate souvenirs and hampers given out by businesses may not be eligible. The procurement department should start detailing the sales tax or the existing tax paid for their items used a raw material. As the GST is expected to be lower than most current indirect tax, there should be some potential cost savings. This is also to avoid being overcharged by supplier that intends to add the GST over the existing price of its supplies after sales tax, there should be some potential cost saving. Human resource factor: New staff may need to be employed to ensure a business is compliant and conversant with the GST requirement. As most staff have not been exposed to GST, training needs to be conducted. Accounting system and account payable: The business would require an appropriate accounting system to keep track of the GST amounts. Most systems could be upgraded, and it is important to notify software vendors to test run the data to avoid any potential complication. Cash flow management: Businesses should be aware that output GST may have to be settled before settlement of sales invoices by customer. Meanwhile, payables on which input tax has been claimed but remains unpaid after six months have to be accounted as output tax and are to be reclaimed as input tax only after payment is made. Businesses are concerned about the timeliness of the refund process as delays would results in a higher working capital cost. In addition, businesses that have thin margins are worried about the speed of the refund for input tax, especially if the business is mainly exported-oriented and procure its raw material locally. 3.3 OTHER IMPACTS: The expected impact on corporate and income taxes are as published in the news recently. Deputy Finance Minister Chor Chee Heung quoted that Malaysia will see a gradual reduction in its corporate and income tax rates once the proposed Goods and Services Tax (GST) is in place by mid-2011. He does not think that there was a timeline for achieving this reduction in corporate and income taxes, as this is a long-term objective of the government. Once the GST come into play, it will be a broad based tax and the trend is, once GST is implemented, corporate and income taxes will gradually be reduced. Chor also disclosed that businesses related to services such as those in the food and transportation sectors, would be exempted from the proposed GST. He gave assurance that the cost of living and lifestyle of the people would not increase or be affected with the implementation of a GST. He also added that the implementation of GST would not cause inflation. Once the GST is in, the service tax and sales tax (now imposed) would be abolished. Both taxes are quite high at 10 per cent and five per cent respectively. The GST at four per cent is considered very low. Meanwhile, the Finance Ministrys Tax Review Panel Chairman, Ms. Kamariah Hussain, said there would be revenue gains of about 1.0 Billion Ringgit for the government with the GST implementation. She explained that the introduction of the GST was part of an overall tax reform in the country. With the GST, the government would have a better mix of revenue, and not be too dependent on income tax and petroleum income. Second Finance Minister, Ahmad Husni Hanadzlah had indicated that while the GST would replace the existing sales and services taxes, it would not put pressure on prices and to ease the burden of consumers, staple foods such as rice, sugar, cooking oil and flour would be exempted from it. 3.3.1 IMPACT OF GST ON SMALL MEDIUM ENTERPRISE (SME). SMEs form the backbone of the business activities of a nation. Other than encouraging the growth of new industries such as tourism and biotechnology-based industries, the Government (2004 Budget Proposals) too has singled out SMEs to spearhead domestic growth. However, there is a group of à ¢Ã¢â€š ¬Ã‹Å"unhappy people representing non-governmental organizations (NGOs) and the public who have expressed their non-approval for the introduction of the proposed GST. Their main argument is that GST favours the rich and burdens the poor at large. Their contention is that it will burden the people and contribute to the widening gap between the rich and the poor, not to mention the rise in the inflation rateà ¢Ã¢â€š ¬?. However, tax practitioner, Beh Tok Koay is of the opinion that perhaps this small group lacks an understanding of the whole system of GST. It is supposed to be broadbased and will replace the service and sales tax system, and this in turn will help to reduce income tax ratesà ¢Ã¢â€š ¬?. There could be two GST rates: a lower rate for SMEs and a higher rate for large enterprises. Imposing two GST rates is, however, difficult to administer as they provide ample room for tax avoidance and increase compliance cost. Lowering the compliance cost of GST would ease the burden of SMEs. If there is convincing data to show that the compliance cost of SMEs are lower if the accounts are computerized, then the Government could provide software packages to the licensees to enable them to correctly compute GST. Free training and seminars including visits should be extended to SMEs to enable them to have a better understanding of the compliance requirements. One other option is to exempt small busine sses from GST altogether but such a decision too has its drawbacks. The Government has to analyze the revenue gain as compared to the compliance cost before making a decision to determine the threshold limit. With the two-year window period before GST is in force, all of us have a role to play in contributing towards the development of a better broad-based consumption tax system which ultimately would help reduce the rates of income tax. No doubt, everyone especially the SMEs will eagerly await the final introduction of the GST system and the extent of the expected income tax rate cuts. The business community, NGO and charity organization are concerned about the ability of the authorities to implement GST smoothly. Australia, for example, had to bring in foreign experts to help in rollout of GST. It would undermine investor confidence if the GST is not implemented in a structured manner with minimal hiccup. Burdening the poor and those economically vulnerable: Some 32% of the household in Malaysia have an income under RM2,000 per month. The introduction of GST without the necessary revamp of subsidies will result in a heavier financial burden on poor and low-income families. Families with an income below RM2,000 a month do not have to pay personal income tax. With GST, things that are not basic necessities toys, processed food, can food, packet drinks, and so on, could increase existing inflationary pressures. The ongoing restructuring of the subsidy will also create the tension, discomfort and dissatisfaction as people eligible for subsidy could unintentionally be left out as the government establishes and tries to refine its method of distribution. CHAPTER 4 4.0 CONCLUSION GST is unavoidable. It will just be a matter of time when it will be implemented. It may not be a perfect system, but has worked well as a revenue base for other countries. Malaysias problem may lie more in public education, implementation and enforcement. To move forward, Malaysia has to conform to the free trade vision of ASEAN and cannot lag behind the other countries. As of today, apart from Malaysia, only Myanmar and Brunei has yet to implement the GST. GST modernises the tax system by addressing tax evasion committed by free riders who want every benefit but refuse to pay for it, or rather have others to pay for them. GST will certainly be a good platform to increase the Governments revenue. Concerns of it being regressive can be overcome by careful and prudent classifications of zero rated supplies and exempt supplies for essential items as against standard supplies for non essential and luxury items. One good point of starting late is the ability to learn from the mistakes of others. The government has to be fully transparent in the implementation of the proposed GST. In this borderless world, news and knowledge cannot be curbed. The masses are getting more intelligent and informed. It will not be prudent for the government of the day not to move forward towards a more modern tax system. Rather than blind opposition, critics should provide examples and lessons learnt from the weaknesses of other nations in the implementation of GST or VAT. However, based from past experience, the skeptism voiced is understandable. We have heard of past Auditor General Reports on the wastage and the leakage of public funds into the pockets of the well connected; of RM 25 screw drivers being bought through tender at a price of RM200; commissions running into millions of ringgit for the purchase of Sukhov jets and submarines; and billions swallowed in the PKFZ scandal. The sums involved are astronomical. Then we have newly built hospitals that cannot be used, court room complexes with leaked ceilings and stadium roofs that collapsed in the absence of even a small earthquake. So, whether the GST will finally proved to be good or bad for the country will remain a question mark until its actual implementation. The actual salary increase as promised by the government might not be the expected pot of gold at the end of the rainbow if the GST is not properly implemented. The Goods Service Tax In Malaysia The Goods Service Tax In Malaysia IS THE INTRODUCTION OF THE GOODS SERVICE TAX (GST) IN MALAYSIA GOOD OR BAD? Chapter 1 1.0 INTRODUCTION. In the new global economy, more companies are operating cross border, and as such are faced with the need to deal effectively with many different taxes, often in many different countries, each with different rates, ruling and application. Coupled with this, the regulatory environment is increasingly challenging. The IMF has been trying to push for all countries to adopt the Goods Service Tax (GST), or also known in certain countries as Value Added Tax (VAT), so as to create a more level playing field amongst trading nations. Direct taxes have in the past been used to camouflage à ¢Ã¢â€š ¬Ã‹Å"protectionism policy of certain countries. High tariff on certain product like motorcar has prevented healthy competition amongst trading nations. The general populations of that country are left without a choice but to consume the local products, as imported products have become more expensive with the high tariff. Often, because of this, the local products tend to be inferior in quality as the re is no real incentive to compete. In the 2005 Budget, the Government of Malaysia announced that GST will be implemented on Jan 1 2007 to replace the current sales and service tax (SST). Following public outcry, on 22 February 2006 it announced a deferment to allow lead time to businesses for potential changes in processes, development of software and personnel training. The first reading of the GST Bill was tabled in December 2009 and the second and third reading is expected in April 2010. The Prime Minister recently announced that the increase in revenue expected from the introduction of GST will be used mainly to finance the hike in Civil Servants salary and to finance other infrastructure works for the benefit of the nation at large. Problem Statement Is GST really needed for Malaysia? If so, how does it affect the general public and the country as a whole? The aim of this paper is to discuss and bring to attention the problems which we might face with the implementation of the GST, or if we are to remain status quo with the SST. Chapter 2 Literature review The Ministry of Finance presented the following information to highlight on GST. It stated that it would be part of the overall tax reform to overcome the inherent weaknesses in the SST and to reduce the reliance on revenue from direct taxes and petroleum. GST is a more efficient and effective tax system as it is self policing and has an in-build cross checking features. It enhances tax compliance and deals with less bureaucracy. It is also a more stable source of revenue compared to income tax and less susceptible to economic downturn due to the consumption nature of the tax. The main types of taxes are direct and indirect taxes. Direct taxes are: Corporate Tax, Personal Income Tax, Real Property Gains Tax and Stamp duty whilst indirect taxes are Tariff (or Customs Duty), Excise Tax, SST (currently practiced in Malaysia) and GST. Contribution from petroleum revenue to total revenue increased from 29.1% (1990) to 40.1% (2008). The current high petroleum revenue is not sustainable as it is a depleting resource therefore and alternative source have to be sought. With the present average birth rate of 2.2, it is expected that by 2030, 12% of the population will be above 60 years old which almost double the current number. The working population paying taxes will therefore reduce, putting a greater burden on a smaller group of people. GST is a broad-based tax that distributes the burden of taxation among a larger section of the population based on consumption. GST preserve the incentive to work and encourages enterprise as it is not a progressive income tax. The tax rate does not increase according to income level; it is flat at the determined rate. It is levied at the production and distribution stages, thereby incorporating a self-policing mechanism that facilitates administration and makes it more difficult to avoid or evade. This further reduces the possibility of revenue loss through understatement of tax evasion. The GST model implemented in Malaysia is not expected to have cascading, or pyramiding, effect as the tax on a particular good depends upon its final value, and not the number of production and distribution channel it passes through. Furthermore, the output tax to be paid will be offset against the input tax, and there is no GST levied over GST. GST is expected to provide a more stable source of revenue as consumption is less affected by economic cycles compared to income tax. It can be an effective tax on the à ¢Ã¢â€š ¬Ã‹Å"shadow economy, as those involved would consume, and thus pay indirect taxes through GST. It is likely that those involved in such activities would buy luxury goods, which would be subjected to GST. The government is cutting its operating expenditure for 2010 by 13%. This shows it is aware of the growing deficit that has widened due to the stimulus package. Recently, Fitch rating agency has cut the rating of the ringgit, which may cause imported inflation if it depreciates, and the International Monetary Fund commented that the GST needs to be implemented urgently. Malaysias budget 2010 reports on GST; is that, it is currently at the final stage of completing the study on the implementation, where analysts are measuring the social impact of its presence in Malaysia. The Malaysian government said that it could be possible for them to implement this in the near future. Looking at Malaysia in a broader scale, GST will not only affect big businesses, but small and medium enterprises (SME) as well. Although there were nimble of past information saying that a food outlet can only charge GST if its annual turnover is above RM3 million (3,000,000 Ringgit Malaysia), the GST compliance requirements and thresholds has not been officially announced. If we were to take into account GSTs implementation into goods and services, we have to assume that it will happen to all stages of the supply chain; which means from the purchase of raw materials or start-up goods all the way to end-user (consumer ready) products available for sale. Ultimately in a product, GSTs charged to every level are passed on to the next person and ultimately, the consumer. A Tax Review Panel was formed in middle of 2005, and it has come out with a Discussion Paper intended for businesses to understand the basic administrative requirements and procedures when GST is implemented so that they know the impact of GST. Secondly, the Tax Review Panel invites the business community and other relevant organizations and associations to review the proposal in that paper. Thirdly, by having a public consultation, it provides an appropriate forum for both the public and private institutions to exchange views with members of the Tax Review Panel so as to understand the rationale behind the proposals initiated. The GST was supposed to be implemented in Malaysia in the year 2007; however the government has to defer the move due to critical reviews by certain quarters. After losing four States to the opposition, it has to tread on a careful path in order not to lose more public support. It cannot afford to make any more major mistake in the wake of its dismal performance in the last General Election. GST is generally known as a tax system which results in regressivity (i.e. people with less pay a greater share of their resources than those with more), in contrast with the ideal aim of progressivity which is generally sought when implementing a tax. It is sometimes argued that a GST system does not work in a poor region such as Africa, where most countries have heavy external debt burdens, malnutrition, civil wars and lack of food and medicines which often result in inhuman living conditions. Nevertheless, with the support of the IMF, VAT/GST systems were designed in many African countries to combat or at least alleviate the adverse effect of VAT/GST regressivity by having a list of exemptions and zero-ratings which apply (generally speaking) to basic foodstuffs and other basic necessities. GST is not always simple to administer, contrary to what the advocates of GST would want countries to believe during the transformation stage. Unless a proper GST administration, supported by modern technology and electronic communication systems can be implemented, GST administration will inevitably be costly for both the Revenue Authorities and the business sector. The output/input mechanism of the GST system, coupled with GST refunds, may provide the ideal opportunity for fraud where corrupt officials and unscrupulous businesses exploit weaknesses in the system. This again results in a defensive attitude from the Revenue Authorities, resulting in bad communication, cash flow and other GST cost. In 1992, a Free Trade Agreement (FTA) was signed which reduced import tariffs between ASEAN member countries. In the first three years of the FTA, exports amongst the ASEAN countries grew from US$43 billion to US$80 billion. In 1997, the leaders of ASEAN adopted the vision to build a stable, prosperous and highly competitive economic region, in which there is a free flow of goods, services and investments, a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities. The plan is to remove all tariffs for the six more developed countries by 2010 and for all countries by 2015. The summit also progressed the efforts to integrate ASEAN with the much larger economies of Asia- Pacific, specifically China, Japan, South Korea, India, Australia, and New Zealand. China signed a pact to introduce the worlds largest free trade zone by 2010, covering almost two billion people. Japan signed a similar agreement to take effect by 2012. India agreed to join in by 2011. Australia and New Zealand have agreed to talks starting next year to free up trade within a decade. The master plan is to have a free trade zone that can compete with the US and EU. In South East Asia, Malaysia remains one of the few countries yet to adopt the GST system, which would indirectly be in the way, if we want to be part of this master plan. In Malaysia, it was announced that essential goods and services will not be subjected to GST, but fears that GST will spark a chain reaction that will increase the prices of most non-controlled items should not be dismissed. We have seen numerous examples of when there is an increase in a certain commodity; it sparks a price rise in most goods and services. For example, when the petrol price increased to RM2.70, prices of most goods, foods and services were hiked. But after the petrol price dropped, there has not been a substantial correction in the prices of goods, food and services. The relevant ministries are powerless to mitigate the situation and curb the necessary inflation. A recent example is on the removal of the subsidy on white bread resulting in price increase of one loaf of bread by 20 to 30 cents. The Deputy Domestic Trade, Cooperative Consumer Affairs Minister can only comment that the price adjustment was not necessary, urge traders to practice corporate social responsibility and call on the consumers to execute their power in hand. All these statements will not effectively curb excessive profiteering and traders taking opportunity to increase the price of goods and service. The public would want to know how the government intends to avoid the similar predicament What is GST and how does it work? GST is a consumption tax charged on a wide range of domestic international products, goods and services. Its a broad-based tax imposed on every level of a product, from raw materials all the way to finished goods. The proposed implementation of GST will replace the current Malaysian service tax and sales tax. Broadly, GST works by offsetting GST paid on purchases (input tax) against GST due on sales or supplies made (output tax). This is referred to as the credit offset mechanism. The multi tier stages of tax helps to ensure that GST paid by businesses for purchases does not end up being a permanent cost. However, the consumer ultimately bears the burden of the tax. Conceptually, GST is imposed on the value added to goods or services by each separate processor in the production and distribution chain. This can be seen in the simple illustration below. GST to Government RM 4 + RM2 = RM6 (i.e. 4% x RM 100) i.e.4% x RM 150 = RM6 Output tax i.e. 4%x150 Less RM4 Input tax RM2 Net 4% is the assumed standard rate of GST. It is assumed that the entire output is taxable and all input taxes are creditable. FINAL CONSUMER Cost to consumer = RM 156 SUPPLIER Selling price = RM100 GST(4%) = RM 4 Total = RM 104 MANUFACTURER Cost = RM 100 Value added = RM 50 Total = RM 150 GST (4%) = RM 6 Total = RM 156 2.1 SOME CONCERN ABOUT THE INTRODUCTION OF GST. There were some concerns that Malaysians could suffer even more with the introduction of the Goods and Services Tax (GST). GST-driven inflation would be a calamity that the struggling lower-income group could do without. The GST Bill was tabled in Parliament at the end of the Budget sitting that ended on 17 December 2009. At its first reading, the bill was just mentioned, but there was no explanation of the bill or any debate. The second reading is when the bill is open for debate and proposed amendments. This may come as early as March 2010 for the GST Bill. Once approved, the new tax can be implemented as early as 2011. The table below lists the governments tax revenue for 2008 which contributed RM112.9 billion or 70 per cent of total government revenue. Government Tax Revenue in 2008 Personal Income Tax  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 15.0 bil Company Tax  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 37.7 bil Petroleum Tax  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 24.2 bil Export and import duties  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM  Ãƒâ€šÃ‚   5.4 bil Excise duties  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 10.7 bil Sales and Services Tax  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   RM 11.7 bil As shown in the table, the biggest source of tax revenue is company tax, which at 26 per cent of declared profits, currently brings in RM37.7 billion into government coffers. Petroleum tax makes up the second biggest tax item while the tax levied on the 1.5 million individuals who are now currently paying personal income taxes in Malaysia makes up the third biggest. All these taxes are deemed progressive for they tax the richest individuals and the companies that are making profits. Progressive taxes do not burden the poorer sectors of society. Progressive taxes tend to equal out income differences between the rich and the poor in society. It was argued that regressive tax regimes, on the other hand, burden the poor. Sales taxes are generally regressive as they tax consumption and not income. But sales tax in Malaysia has different rates for different types of goods and the government can make them less regressive by levying sales taxes exclusively on good that are consumed by the richer sectors of society such as expensive cars, big houses, overseas travel, expensive restaurants and other luxury items. The Goods and Services Tax, however, is perceived to be even more regressive for it is levied at a flat rate on a very wide range of products including many items that the poorer people need to buy. It might lead to a rise in prices and would definitely hit the poorest the hardest.   As in most countries with the GST in place, a reduction of corporate tax and personal tax will follow suit. This then, is seen as the real reason that the GST is being brought in à ¢Ã¢â€š ¬Ã¢â‚¬Å" to make Malaysia more business friendlyà ¢Ã¢â€š ¬? by cutting corporate tax (which has already been reduced markedly from the 40 per cent level in 1988 to its current 26 per cent). 2.2 LACK OF INFORMATION AND CONFUSION ON GST. The piecemeal release of information is creating great concern among the people and in the business sector. For example; Will the authorities furnish an extensive list of item that will be charged GST, and what will be exempted? If a product, like rice or chicken is exempted, does the exemption apply across the board regardless of the form of the product? For example, is cooked rice or cut, frozen or marinated chicken also exempted? What is the difference between exempt and zero-rated GST? Will there be any reduction in personal and corporate tax? What changes will be made to the sales and service tax? There is a perception that as GST is a multistage tax, it would result in higher effective tax rate than 4%. As GST is very technical, most people are unaware how it will impact them. When will the GST rate be reviewed? Recent media statement on its impact did not improve opinion on the introduction of GST. It is reported that under the sales and services tax system, the burden on the poor is 2.38%, but under the GST it will be 2.17%. For the higher income group, the tax burden will be reduced from 13% to 2.74%, according to the Finance Ministry. The overall savings for households will be between RM14.52 and RM346.92 yearly. This clearly contradicts other statement from politicians, and the public perception, that the GST will be inflationary. But as no further details are provided on how the savings are arrived at, public sentiment remains negative on GST. CHAPTER 3 EXPECTED IMPACT OF GST 3.1 Impact on the people in the street. The public is generally concerned that the introduction of GST will hit their wallets directly. In an initial assessment, as the GST is expected to be lower than service tax, the bill for a restaurant meal will be 1% lower as the service tax rate is 5% and GST is 4%. For other services liable to service tax, a GST rate lower than service tax should result in a slight decrease in charges if the cost of the other components in providing the service remain the same. On goods that attract sales tax, the current rate seems higher than the proposed GST, hence there might be a reduction if there is no further adjustment. Current rates are as follows; à ¢Ã¢â€š ¬Ã‚ ¢ Fruits, certain foodstuff and building materials (5%) à ¢Ã¢â€š ¬Ã‚ ¢ General goods, including motor vehicle (10%) à ¢Ã¢â€š ¬Ã‚ ¢ Liquor and alcoholic drinks (20%) à ¢Ã¢â€š ¬Ã‚ ¢ Cigarette and cheroots (25%) For hawkers; even though they do not have a turnover of RM500,000 yearly, so are not required collect GST, the material procured, for example, noodles, fish balls, processed meat, chicken, equipments for the stall may be subjected to GST, resulting in price hike. But without detailed knowledge or mapping, or even information on the duties charged, the people are uncertain whether the prices of goods and services will remain stagnant, increase or decrease. 3.2 IMPACT ON BUSINESSES. The implementation of GST is expected to impact business in the following manner: Compliance costs are expected to be incurred as there is requirement to track the input tax and output tax to determine refund or tax to be submitted. Even though some Malaysian companies are already paying sales tax or service tax, there was no input tax to be monitored and accounted for to offset against output tax. Business process and procurement need to be mapped out, especially with respect to suppliers and promotional items. For example, a new car attract GST, but items provided for free during promotion like sports rims or a GPS system à ¢Ã¢â€š ¬Ã¢â‚¬Å" may not be eligible for an input tax claim. Likewise the corporate souvenirs and hampers given out by businesses may not be eligible. The procurement department should start detailing the sales tax or the existing tax paid for their items used a raw material. As the GST is expected to be lower than most current indirect tax, there should be some potential cost savings. This is also to avoid being overcharged by supplier that intends to add the GST over the existing price of its supplies after sales tax, there should be some potential cost saving. Human resource factor: New staff may need to be employed to ensure a business is compliant and conversant with the GST requirement. As most staff have not been exposed to GST, training needs to be conducted. Accounting system and account payable: The business would require an appropriate accounting system to keep track of the GST amounts. Most systems could be upgraded, and it is important to notify software vendors to test run the data to avoid any potential complication. Cash flow management: Businesses should be aware that output GST may have to be settled before settlement of sales invoices by customer. Meanwhile, payables on which input tax has been claimed but remains unpaid after six months have to be accounted as output tax and are to be reclaimed as input tax only after payment is made. Businesses are concerned about the timeliness of the refund process as delays would results in a higher working capital cost. In addition, businesses that have thin margins are worried about the speed of the refund for input tax, especially if the business is mainly exported-oriented and procure its raw material locally. 3.3 OTHER IMPACTS: The expected impact on corporate and income taxes are as published in the news recently. Deputy Finance Minister Chor Chee Heung quoted that Malaysia will see a gradual reduction in its corporate and income tax rates once the proposed Goods and Services Tax (GST) is in place by mid-2011. He does not think that there was a timeline for achieving this reduction in corporate and income taxes, as this is a long-term objective of the government. Once the GST come into play, it will be a broad based tax and the trend is, once GST is implemented, corporate and income taxes will gradually be reduced. Chor also disclosed that businesses related to services such as those in the food and transportation sectors, would be exempted from the proposed GST. He gave assurance that the cost of living and lifestyle of the people would not increase or be affected with the implementation of a GST. He also added that the implementation of GST would not cause inflation. Once the GST is in, the service tax and sales tax (now imposed) would be abolished. Both taxes are quite high at 10 per cent and five per cent respectively. The GST at four per cent is considered very low. Meanwhile, the Finance Ministrys Tax Review Panel Chairman, Ms. Kamariah Hussain, said there would be revenue gains of about 1.0 Billion Ringgit for the government with the GST implementation. She explained that the introduction of the GST was part of an overall tax reform in the country. With the GST, the government would have a better mix of revenue, and not be too dependent on income tax and petroleum income. Second Finance Minister, Ahmad Husni Hanadzlah had indicated that while the GST would replace the existing sales and services taxes, it would not put pressure on prices and to ease the burden of consumers, staple foods such as rice, sugar, cooking oil and flour would be exempted from it. 3.3.1 IMPACT OF GST ON SMALL MEDIUM ENTERPRISE (SME). SMEs form the backbone of the business activities of a nation. Other than encouraging the growth of new industries such as tourism and biotechnology-based industries, the Government (2004 Budget Proposals) too has singled out SMEs to spearhead domestic growth. However, there is a group of à ¢Ã¢â€š ¬Ã‹Å"unhappy people representing non-governmental organizations (NGOs) and the public who have expressed their non-approval for the introduction of the proposed GST. Their main argument is that GST favours the rich and burdens the poor at large. Their contention is that it will burden the people and contribute to the widening gap between the rich and the poor, not to mention the rise in the inflation rateà ¢Ã¢â€š ¬?. However, tax practitioner, Beh Tok Koay is of the opinion that perhaps this small group lacks an understanding of the whole system of GST. It is supposed to be broadbased and will replace the service and sales tax system, and this in turn will help to reduce income tax ratesà ¢Ã¢â€š ¬?. There could be two GST rates: a lower rate for SMEs and a higher rate for large enterprises. Imposing two GST rates is, however, difficult to administer as they provide ample room for tax avoidance and increase compliance cost. Lowering the compliance cost of GST would ease the burden of SMEs. If there is convincing data to show that the compliance cost of SMEs are lower if the accounts are computerized, then the Government could provide software packages to the licensees to enable them to correctly compute GST. Free training and seminars including visits should be extended to SMEs to enable them to have a better understanding of the compliance requirements. One other option is to exempt small busine sses from GST altogether but such a decision too has its drawbacks. The Government has to analyze the revenue gain as compared to the compliance cost before making a decision to determine the threshold limit. With the two-year window period before GST is in force, all of us have a role to play in contributing towards the development of a better broad-based consumption tax system which ultimately would help reduce the rates of income tax. No doubt, everyone especially the SMEs will eagerly await the final introduction of the GST system and the extent of the expected income tax rate cuts. The business community, NGO and charity organization are concerned about the ability of the authorities to implement GST smoothly. Australia, for example, had to bring in foreign experts to help in rollout of GST. It would undermine investor confidence if the GST is not implemented in a structured manner with minimal hiccup. Burdening the poor and those economically vulnerable: Some 32% of the household in Malaysia have an income under RM2,000 per month. The introduction of GST without the necessary revamp of subsidies will result in a heavier financial burden on poor and low-income families. Families with an income below RM2,000 a month do not have to pay personal income tax. With GST, things that are not basic necessities toys, processed food, can food, packet drinks, and so on, could increase existing inflationary pressures. The ongoing restructuring of the subsidy will also create the tension, discomfort and dissatisfaction as people eligible for subsidy could unintentionally be left out as the government establishes and tries to refine its method of distribution. CHAPTER 4 4.0 CONCLUSION GST is unavoidable. It will just be a matter of time when it will be implemented. It may not be a perfect system, but has worked well as a revenue base for other countries. Malaysias problem may lie more in public education, implementation and enforcement. To move forward, Malaysia has to conform to the free trade vision of ASEAN and cannot lag behind the other countries. As of today, apart from Malaysia, only Myanmar and Brunei has yet to implement the GST. GST modernises the tax system by addressing tax evasion committed by free riders who want every benefit but refuse to pay for it, or rather have others to pay for them. GST will certainly be a good platform to increase the Governments revenue. Concerns of it being regressive can be overcome by careful and prudent classifications of zero rated supplies and exempt supplies for essential items as against standard supplies for non essential and luxury items. One good point of starting late is the ability to learn from the mistakes of others. The government has to be fully transparent in the implementation of the proposed GST. In this borderless world, news and knowledge cannot be curbed. The masses are getting more intelligent and informed. It will not be prudent for the government of the day not to move forward towards a more modern tax system. Rather than blind opposition, critics should provide examples and lessons learnt from the weaknesses of other nations in the implementation of GST or VAT. However, based from past experience, the skeptism voiced is understandable. We have heard of past Auditor General Reports on the wastage and the leakage of public funds into the pockets of the well connected; of RM 25 screw drivers being bought through tender at a price of RM200; commissions running into millions of ringgit for the purchase of Sukhov jets and submarines; and billions swallowed in the PKFZ scandal. The sums involved are astronomical. Then we have newly built hospitals that cannot be used, court room complexes with leaked ceilings and stadium roofs that collapsed in the absence of even a small earthquake. So, whether the GST will finally proved to be good or bad for the country will remain a question mark until its actual implementation. The actual salary increase as promised by the government might not be the expected pot of gold at the end of the rainbow if the GST is not properly implemented.