Thursday, January 9, 2014

Employees' salaries must be increased by 6% following GST implementation

Why not.

This is the time to start raising the salaries of employees as the sentiment would be that, it is in anticipation of the GST implementation. You do it any other time and people (unscrupulous traders/service providers) start to increase the prices of goods or services, giving this excuse: " you just had your salary revised; you can afford it".

Do it in the name of "mitigating the effect of the GST implementation" and people will be skewed to think that increase of prices of goods would be a 'double blow' and therefore would become an unlikely scenario.

Double blow because -
Firstly the GST, subsidy cut, revision of electricity tariff,
Secondly increase in the prices of goods (anticipated).

Daily Express, January 8, 2014

KPMG says 6% would be a good starting point

KPMG Malaysia, a global audit, tax and advisory services company, is urging both the public and private sectors to gradually increase employees' salaries, in view of the Goods and Services Tax (GST) that will be implemented in April 2015.

Newly-appointed Managing Partner Johan Idris suggested a six per cent increase in employees' salaries per annum, to help tide over the high cost of living in Malaysia.

"Six per cent would be a good example to begin with, especially after the GST implementation, new electric tariffs, petrol subsidy cuts and new toll rates," he told reporters, after the launch of the second-edition of the Study on Non-Executive Directors 2013 — Profile and Pay publication.

Johan said that the GST implementation was inevitable, as Malaysia was a developing and a highly-subsidised country.

"As a developing country, many foreign companies come in to conduct business here, and they also enjoy the same cost structure like the locals.

"So, by implementing the GST, which will also be levied on foreign companies and expatriates here, the government can spend revenue accrued appropriately, to help balance its budget," he said.

Source: The Edge Malaysia

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