Why the sales tax and service tax (SST) need to be replaced with GST?
GST is a more comprehensive, effective, transparent, and
friendly tax system. GST can overcome the various weaknesses inherent
in the present consumption tax system. The inherent weaknesses under
the present tax system are the cascading tax, double tax and pyramiding
tax, tax erosion and leakages through transfer pricing and other means.
Besides that, GST is expected to increase tax compliance and is easier
to administer in view of its self policing method. Besides that, the
businesses are required only to submit simplified tax returns based on
prescribed formats. All records and documents relating to the relevant
transaction are required to be kept in the business premises for audit
by the GST auditor.