GST Rules Or Ruins? From A Ship Financier's Perspective

The hype is over! The long-debated goods and services tax ("GST") was implemented on 1 April 2015 by virtue of the Goods and Services Tax Act 2014 [Act 762] ("the GST Act"). Introduced as part of the government's tax reform programme to enhance the efficiency and efficacy of the taxation system, the rationale for GST is to eliminate inherent weaknesses in the now-abolished sales and service tax, which had a cascading effect due to what is known as "double taxation".¹ That said, like many other sensational political issues in Malaysia, there are several differing schools of thought on its economic implications on a larger scale.

The key objective of this article is to provide an overview on the mechanics and dynamics of GST that a financier in Malaysia may face in connection with ship financing.