Campbell Soup Company

Question: Talk about theCampbell Soup Company. Answer: Presentation Campbell Soup is an American possessed organization represent considerable authority in soups and related items with yearly deals of roughly $8 billion (Campbell's Soup Home, 2017). Campbell soup is driven with the enthusiasm for giving solid food to its clients and giving them the association in life through shared recollections. The companys acclaimed trademark is Nourishing people groups lives all over the place, each day. (Campbell's Soup Home, 2017). Diagram of Vision and Mission Campbell has clear crucial vision proclamation which has been the key drivers and executives of the companys development and progress throughout the years. Campbells statement of purpose is Together we will manufacture the universes most unprecedented food organization by sustaining people groups lives all over the place, each day. (Campbell's Soup Home, 2017) From the statement of purpose, it outlines that Campbell Soup Company is committed to feeding people groups survives offering them assortment, reasonable, scrumptious and food decisions that will assist them with living healthy lifestyles through a solid eating routine. At Campbell food matters to them and their vision is to be word pioneers in the producer of great refreshments and nourishments which have been a culture for as far back as a long time since the organization was begun. Under the current authority of Denise Morrison, she has added more sense to the companys vision as a method of adjusting to the changing powers i n the market through including the proviso that Campbell will be an innovator underway through imagination and development in the business. Outside Analysis of Campbell Soup Company Through leading an outside survey of Campbells serious condition, it is simpler to anticipate the elements of the contenders, expectations, and reactions which can help in seeing how the business and the market are carrying on as a method of contending adequately (Henry, 2008). Vermin Analysis A PEST examination will help with distinguishing the chances and dangers in the food business just as creating procedures that will help the organization in becoming even in an extreme time when Campbell is revealing declining deals. Political Factors Latest there have been severe guidelines by the legislature on GMO nourishments, and this has made the customers move to natural food sources which present as a chance to Campbell soup. The administration has additionally been on the cutting edge through consenting to unhindered commerce arrangements which present as a chance to Campbell to go universal. Monetary Factors Campbell can become dependent on a balancing out economy and the increasing pace of work in U.S and different nations it works in. In any case, the expanding pace of work in creating countries presents a huge danger to the companys flexibly anchor since it prompts high selling costs in the stores. Campbell must grow new systems to moderate against the issue. Sociocultural Factors Campbell can develop by offering top notch items that will fulfill its clients way of life. The organization additionally can exploit the expanding social decent variety through thinking of an item blend that will address the issues of the objective clients. Campbell needs to devise a methodology that will guarantee predictable developments in spite of the holes in riches. Innovative Factors Campbell has the chance of using innovation to deliver imaginative items that will help them in coordinating the opposition. Denise Morrison has balanced the Campbell soup companys vision to Creating imaginative items through innovation as a method of tending to the market difficulties and patterns. Ecological Factors With expanded degrees of a worldwide temperature alteration, the creation of natural nourishments is compromised by disintegrating atmosphere conditions which present a noteworthy danger to Campbell's business life. From the a dangerous atmospheric devation circumstance, it shows that Campbell needs to have a methodology that will guarantee a satisfactory flexibly chain. Legitimate Factors Campbell receives increasingly solid natural arrangements, however it needs to improve its image picture. The as of late actualized antitrust laws is a danger to the companys mergers and securing missions as a method of extending. Campbell needs to create other development procedures that are away from the obtaining in the U.S area. Doormen Five Forces Analysis In breaking down the outside serious condition that Campbell soup organization is in the business a Porter five powers examination is a helpful apparatus. Serious Rivalry inside the Industry In the food business, the opposition is solid as organizations vie for quality, wellbeing factors, value, item advantages and development (The Food Processing Industry, 2010). Campbells essential adversaries are Heinz Company, Nestle, General Millis, Kraft nourishments, and Progresso. Campbell being a worldwide organization it faces rivalry both locally and universally because of the creation of comparative items in the business. Of concern is the ascent of organizations that offer soup items at lower costs which increment the weight. Regardless of the tight rivalry Campbell keeps on delivering quality soup as a method of debilitating the competition. To be on a similar level Campbell needs to deliver better soup and different items than separate itself. Danger of New Entrants The capacity of another participant into a market relies upon the current passage boundaries made by the organizations in the business (Wheelen Hunger, 2007). Campbell Companys essential opponents are Kraft Foods and General Mills who have made a significant obstruction through elevated levels of advancement and promoting. Little organizations experience issues in entering the market as they battle for rack space in the primary retailers. The Threat of Substitute Products The danger of organizations that offer substitution items is high in the food business. For example, the ongoing case is Campbell Soup is confronting moderate paces of development due to declining interest for soup items as they are being supplanted by substitutes, for example, Pizza which have gotten increasingly well known over the ongoing years. Dealing Power of Buyers Purchasers impact the business because of their capacity to impact costs, quality, and administrations of the food which makes a window to play contenders against one another. Evaluating incredibly influences the buyers buying choice, and for Campbell, it keeps the costs 20 to 25% higher than different brands in the market. Henceforth buyers pick the conventional brands. Campbell should bring down its costs to draw in and hold its clients, or it will compel its clients to move to substitute items. Bartering Power of Suppliers The nature of items that providers offer essentially impacts their bursting powers. Campbell guarantees it utilizes quality items from providers and this includes some major disadvantages which has constrained Campbell to utilize assorted variety program as a method of enhancing its provider base which presently remains at $129 million (Campbell CSR, 2015). Interior Analysis SWOT Analysis Qualities Campbell Soup Company has reliable deals in the course of recent years. With increasingly innovative progression more open doors will introduce themselves. With the expanded globalization levels it implies more items will be sold universally consequently more market openings. Shortcoming With significant levels of swelling the gross benefit and incomes were influenced. The soup advertise is getting increasingly serious as days proceed. Openings The expanding number of rising economies presents new markets to the organization that will encourage appropriate development. The organization keeps on extending in different combinations, for example, Bolthouse presents business development later on. Dangers The offer capital of consolidated soup is declining regular which presents lost income sooner rather than later. The quantity of laws ordered to direct meat items are making misfortunes to the organization. Serious Analysis Campbell soups top on the rundown contenders are Mondelez International, Heinz Kraft Foods Company and general factories. The organization keeps on getting overall rivalry on the entirety of its items. The opposition exists in the quantity of items that the organization conveys to its clients. The quantity of rivals in the business battle for piece of the overall industry and the buyer dollars. The key zones of rivalry to the organization are value, promoting, accommodation, taste and brand acknowledgment. Campbell soup lost 4% of its piece of the overall industry before the finish of 2016 (CSI Market, 2016). Suggestion and Conclusion From the contextual investigation, Campbell soup has been having fears over the change from Donald to Denise Morrison as the new CEO. In when Campbell is confronting declining deals because of solid market rivalry as it very well may be found in doormen five power model an increasingly experienced CEO is required. Campbell is an extreme time when it is confronting wild rivalry inside the business as significant contenders are getting more grounded and the danger of substitute is high. In light of PESTEL investigation model, Campbell Soup Company has numerous chances to become both locally and universally. Be that as it may, there are striking dangers, for example, an Earth-wide temperature boost, the rising work cost and expanding riches hole in creating countries. Through enhancement, Campbell soup can have the option to relieve against the dangers introduced in the building up country's market. Also, Campbell can grow universally as a method of tending to the antitrust law that was passed as of late. When all is said in done, the PESTLE examination shows that Campbell can possibly become even in the center of extreme change procedure of the pioneer Denise Morrison. References Campbell Soup Company, About Us, on the web, recovered 9 April 2017, https://www.campbellsoupcompany.com/about_us.asp Campbell Soup Co Comparisons to its Competitors, Market offer and Competitiveness by Segment - CSIMarket. (2017). Csimarket.com. Recovered 9 April 2017, from https://csimarket.com/stocks/compet_glance.php?code=CPB Food Processing Industry,(2010), recovered 9 April 9, 2017, https

The color purple and Girl Essay Example For Students

The shading purple and Girl Essay Celies first extraordinary and suffering female relationship is with her more youthful sister, Nettie. Such is the bond between the two sisters that when their stepfather takes steps to assault Nettie, Celie offers herself in her place. Celies life of drudgery and sexual debasement proceeds into her wedded existence with Albert, a man who she at first feelings of trepidation so much she can just allude to him as Mr. He treats her like a slave and he puts forth a valiant effort to cut off the sisters association by blocking Netties letters. Walkers depiction of Celie stresses the hardships of life that a lady can understanding and survive. We will compose a custom article on The shading purple and Girl explicitly for you for just $16.38 $13.9/page Request now Conversely, she portrays Nettie, who turns into an African preacher, as a lady who is to a greater extent a women's activist and is increasingly mindful of the cruel real factors of a male centric culture. Through her letters Nettie attempts to manage Celie and cause her to understand that she merits a superior life. She features the social contrasts and the similitudes among American and African culture. The Olinka ladies she works with appear to be glad to impart their spouses to one another and their lives revolve around work, their kids and their associations with one another since, a lady can't generally have a man for a companion without the most exceedingly terrible sort of segregation and gossip6. Along these lines, Celie shares her better half with Shug Avery, takes a shot at the land and in the home and has a gathering of female companions. The sisters are both first individual storytellers and Walker unmistakably shows that they compose as a demonstration of trust, keeping up their spirits and contacting one another, trusting in one another, instructing one another and supporting each other through the troublesome occasions. Blues vocalist, Shug Avery, is the adoration for Celies life and furthermore her spouses fancy woman. Be that as it may, it is clear, well before Celie meets Shug, that she inclines toward men to ladies, I take a gander at ladies, tho, cause Im not terrified of them7. Celie gets besotted with a photo of Shug, A now when I dream, I long for Shug Avery8. They in the end meet and become hopelessly enamored, starting an on-off long haul lesbian relationship. Shug is a skilled, free lady and shows Celie a break course from an amazing drudgery. She demonstrates her that on the off chance that she needs to be dealt with well and with deference she needs to go to bat for herself. Celie just feels genuinely explicitly adored after her revelation of lesbian delights, denoting another progression towards her freedom. As she acquires self-assurance from being with Shug, she defies Albert, You a lowdown hound is whats wrong, I state. Its opportunity to leave you and go into the Creation. What's more, your dead body is only the doormat I need. 9 Another partner is solid disapproved and solid bodied Sofia. From the outset Celie is jealous of Sofias knowledge, certainty and autonomy and abhorrences her pity of her thus double-crosses her by exhorting her significant other, Harpo to beat her. Whenever she sees him he is battered and wounded and unmistakably Sofia supported herself and hit him back. Celie feels regretful of her selling out and Sofia is enraged yet they can talk and eliminate any confusion air and they snicker together when Sofia encourages Celia to, slam Mr. head open10. To solidify their fellowship, they start to take a shot at a blanket from the wrecked curtains11 Celie made for Sofia when she got hitched. This customary blanket is representative of womens solidarity with each fix speaking to a lady on its own little and immaterial yet when bound together making a solid solidarity and feeling of harmony. Another reference comes when Mr. also, his sibling, Tobias, are on the patio with Celie and Sofia, who are sewing. .ua2914bb0dd29d72eb103159b4bb3d3f1 , .ua2914bb0dd29d72eb103159b4bb3d3f1 .postImageUrl , .ua2914bb0dd29d72eb103159b4bb3d3f1 .focused content territory { min-tallness: 80px; position: relative; } .ua2914bb0dd29d72eb103159b4bb3d3f1 , .ua2914bb0dd29d72eb103159b4bb3d3f1:hover , .ua2914bb0dd29d72eb103159b4bb3d3f1:visited , .ua2914bb0dd29d72eb103159b4bb3d3f1:active { border:0!important; } .ua2914bb0dd29d72eb103159b4bb3d3f1 .clearfix:after { content: ; show: table; clear: both; } .ua2914bb0dd29d72eb103159b4bb3d3f1 { show: square; change: foundation shading 250ms; webkit-progress: foundation shading 250ms; width: 100%; darkness: 1; change: obscurity 250ms; webkit-change: haziness 250ms; foundation shading: #95A5A6; } .ua2914bb0dd29d72eb103159b4bb3d3f1:active , .ua2914bb0dd29d72eb103159b4bb3d3f1:hover { mistiness: 1; progress: murkiness 250ms; webkit-progress: haziness 250ms; foundation shading: #2C3E50; } .ua2914bb0dd29d72eb103159b4bb3d3f1 .focused content region { width: 100%; position: rela tive; } .ua2914bb0dd29d72eb103159b4bb3d3f1 .ctaText { fringe base: 0 strong #fff; shading: #2980B9; text dimension: 16px; textual style weight: intense; edge: 0; cushioning: 0; content adornment: underline; } .ua2914bb0dd29d72eb103159b4bb3d3f1 .postTitle { shading: #FFFFFF; text dimension: 16px; text style weight: 600; edge: 0; cushioning: 0; width: 100%; } .ua2914bb0dd29d72eb103159b4bb3d3f1 .ctaButton { foundation shading: #7F8C8D!important; shading: #2980B9; outskirt: none; fringe range: 3px; box-shadow: none; text dimension: 14px; text style weight: striking; line-stature: 26px; moz-outskirt span: 3px; content adjust: focus; content embellishment: none; content shadow: none; width: 80px; min-tallness: 80px; foundation: url(https://artscolumbia.org/wp-content/modules/intelly-related-posts/resources/pictures/straightforward arrow.png)no-rehash; position: supreme; right: 0; top: 0; } .ua2914bb0dd29d72eb103159b4bb3d3f1:hover .ctaButton { foundation shading: #34495E!important; } .ua29 14bb0dd29d72eb103159b4bb3d3f1 .focused content { show: table; stature: 80px; cushioning left: 18px; top: 0; } .ua2914bb0dd29d72eb103159b4bb3d3f1-content { show: table-cell; edge: 0; cushioning: 0; cushioning right: 108px; position: relative; vertical-adjust: center; width: 100%; } .ua2914bb0dd29d72eb103159b4bb3d3f1:after { content: ; show: square; clear: both; } READ: Martin Luther King Jr EssayShug enters to hear the two men deprecating all the ladies they know. She participate with the sewing and her activity puts her immovably joined with Sofia and Celie. Theres little uncertainty this blanket, with the example Sisters Choice, and its message, will be given to girls and granddaughters. When Sophia is sent to jail her system of female companions come together for to help and bolster her. That she endures her detainment, partition from her youngsters and resulting oppression is a demonstration of this help and her very own quality. One of her primary partners during this period is Mary Agnes and this is another female character that develops in quality all through the story and accomplishes her fantasy. Celies developing freedom is stressed when she begins to wear pants, beforehand a men-possibly piece of clothing, and her money related autonomy is made sure about when she begins her own fruitful fitting business, Folkspants, Unlimited. When Nettie in the long run gets back, rejoining Celie with her youngsters that Alfonso had detracted from her such a significant number of years prior, Celies life is finished. The two stories are about the passing on of understanding and while the peruser never knows whether Kincaids Girl accepted the guidance offered, in The Color Purple, the peruser sees the proof of female counsel and backing being given and taken like the Olinka ladies the ladies are companions and will do anything for one another12. 1503 words. References: 1. Carter, A. (ed) (1986) Wayward Girls and Wicked Women, Virago, pp. 326-7, Girl by Kincaid, Jamaica 2. On the same page. 3. In the same place. 4. Walker, Alice, (1983) The Color Purple, The Womens Press Limited 1983, p. 3 5. On the same page., p. 3 6. On the same page. , p. 141 7. In the same place. , p. 7 8. In the same place. , p. 8 9. In the same place. , p. 170 10. In the same place. , p. 39 11. In the same place. , p. 39 12. In the same place. , p. 141 Bibliography: Carter, A. (ed) (1986) Wayward Girls and Wicked Women, Virago, pp. 326-7, Girl by Kincaid, Jamaica Goodman, Lizbeth (ed) (1996) Approaching Literature: Writing and Gender, Routledge in relationship with The Open University, Milton Keynes Padley, Steve (ed) (2001) Approaching Prose Fiction, The Open University, Milton Keynes Walker, Alice, (1983) The Color Purple, The Womens Press Limited 1983, London.

Employee Compensation Tutorial

Employee Compensation Tutorial © Shutterstock.com | garagestockIn this guide, you will learn a lot about employee compensation including 1) why employees are valuable for a business, 2) how employee compensation and employee benefits are related, 3) laws governing employee compensation, 4) factors affecting employee compensation, 5) the importance of a well-designed employee compensation plan, and 6) the basic components of employee compensation.WHY EMPLOYEES ARE VALUABLEManpower is one of the most important assets of an organization. After all, if you look at the definition of an “organization”, it is said to be composed of a group of people working together towards a common goal or purpose.Therefore, an organization cannot exist without people. A business cannot hope to survive, much less thrive, without its employees or workers. To assume that having top management is enough to make a business or organization operate smoothly is wrong on so many levels, because they are completely ignoring the company’s best asset: its employees.It is the employees’ performance that will determine the organization’s or company’s chances of achieving its short-term and long-term goals. If it ultimately wants to be profitable, or if its goal is growth and expansion, then the employees should put in a very good performance â€" one that will ensure the goals are achieved.In every department of the business, it is the employees who are at work, making sure that operations go on as they should. In the administrative and finance department, you have employees whose expertise are related to management and finance. In a production facility, the employees are the ones who ensure that the production processes are carried out smoothly. In sales, it is the employees that reach out to the market, engaging them so they will end up buying the company’s products or services. Furthermore, a company’s customer service is evaluated based on how the employees assigned interact with customers and take care of their after-sales needs and concerns.Think of the business as a machine, and the employees the cogs that keep it running. Of course, there is a need to make sure that these cogs remain well-oiled, so the machine will continue running smoothly, and provide the expected and desired output.Using that analogy, top management and business owners should also make sure  that its employees are well-compensated.EMPLOYEES COMPENSATION AND BENEFITSMany people interchange employees “compensation” and “benefits”, thinking they are one and the same. In a way, they are similar, in the fact that they are received by the employees from the company that employs them. However, these are two different things.Employee compensation is basically the payment to employees for doing their jobs. People are more familiar with the words “salary”, “wage” or “commission”. Even “tips” fall under employee compensation.This covers items that are contained in formal or standard salary and/or w age programs or structures established by a company, an industry, or a regulatory agency that the company is answerable to. These programs and structures include salary schedules, and programs that are based on merits, bonuses and commissions.Usually, an organization creates its own salary or wage structure, often in compliance with existing labor laws governing compensation. The ranges are usually identified with respect to the corresponding job descriptions; meaning, the higher the accountability and the bigger the responsibility, the higher the pay range.Employee benefits, on the other hand, are those entitlements other than salaries, wages, commissions, and tips, and that can be given to employees in forms other than payment. These often come in the form of health or medical insurance, life insurance, disability insurance, employee stock options and profit-sharing plans, and even retirement plans. Vacation days, holiday pays and maternity and paternity leaves are also considered employee benefits.Learn more about employee benefits in this interesting presentation.[slideshare id=45700616doc=mj11ech14-150311062345-conversion-gate01w=640h=330]Compensation entails payment to the employees, which means it is tangible. Benefits can be intangible or tangible, so if an employee is transferred to a nicer office, allowed the use of a company car, considered for a promotion, or just given recognition by top management, he just got himself some benefits.Another way to distinguish the two is that compensation is a right, while benefits are privileges. Compensation is required by the law, and that is not something that can be strictly said about benefits although, granted, there are some benefits that are mandatory, according to federal law. An example is unemployment insurance.We can also say that benefits are given by companies to its employees in order to supplement their compensation, because they are given on top of the salaries and wages that the latter receive. T he compensation is the cake, and the benefits are the icing on top.LAWS GOVERNING EMPLOYEE COMPENSATIONEvery country with a governing body is bound to have its own set of laws or legislation concerning employees’ and workers’ compensation.These employment or labor laws encompass the rights and duties of both the employers and the employees or workers. This means that, even if the general perception is that the labor laws are in place for the primary protection of employees or workers, they are also established in order to protect the employers.In the United States, the main player when it comes to the implementation of labor laws is the Department of Labor (DOL). To date, there are over 180 federal laws regarding labor that are being implemented. Below are some of the main laws or pronouncements on labor that are currently being enforced.Fair Labor Standards Act (FLSA) prescribes the standards used by employers for wages and overtime pay and requires them to pay at least the fed eral minimum wage applicable to the state. It also underlines the prohibition of hiring children under the age of 18 for potentially dangerous jobs. Although children under 16 years of age are not banned from working, the number of hours they are allowed to work is limited, especially if they also happen to still be going to school.Workers compensation programs per state or industry. While it is true that the DOL is the overseeing agency for matters related to employees’ compensation, the states are not precluded from coming up with their own state workers’ compensation programs. These programs often differ from state to state, and will also depend on the industry that the business belongs to. For example, employees in the maritime industry are governed by the Longshore and Harbor Workers’ Compensation Act.FACTORS AFFECTING EMPLOYEE COMPENSATIONWe can classify these factors into two: external and internal.The internal factors are those that emanate from within the organization or business. They include:Management philosophy. It is a fact that some companies are more generous than others. This is why you cannot blame the top talents for “shopping” when they are applying for jobs in multiple companies. Naturally, they would go for the company that offers the higher compensation, and gives more benefits to its employees.Fiscal capability of the company. As much as the top brass in the company would want to pay a lot to its employees, they have to consider the company’s ability to pay. The company may not be earning much profits to sustain the payment of generous compensation and benefits.Union presence and influence. In larger companies, there are employee unions that hold a lot of power and influence. They are able to negotiate with management regarding employee remuneration.There are also factors or forces outside the company that will affect how companies set up their compensation plans or pay structures.State of the economy. Many times in history, economic downturns have dictated the labor landscape. In worst-case scenarios, millions of jobs have been eliminated and employees laid off. For those who were able to stay with their companies, they had to accept a decrease in their compensation. If the economy is healthy, this means that businesses are also on solid footing, so they will be able to pay their employees on a regular basis.Competition. Companies that want to keep their employees with them will be hard-pressed to make sure they give generous compensation and benefits, especially when their rival companies or the competition is known to offer just as much, if not more, to its employees. It is a fact that competitors not only compete over sales and deals; they also take any opportunity they can to sway some of the most brilliant minds of the competition to their side of the fence. Also, there is that need among businesses to maintain a good reputation to the public, who is more inclined to give its support (and money) to companies who are known to take care of their employees very well.IMPORTANCE OF EMPLOYEE COMPENSATIONUltimately, employee compensation is one of the several ways that management can ensure the survival and longevity of a company. A business will continue to exist, earn profits, and even expand, if it has employees that are willing to put in all the work required. And how do you ensure that they perform? To give them the compensation due them.But if we are to break things down further, we can identify several uses for compensation.Compensation is a tool used to attract, recruit and retain employees. A company will be able to attract more talent, specifically the talent or skill set that they want, if they have a solid and attractive compensation plan in place. Job applicants will naturally seek to be employed in companies that have good compensation plans. Providing fair to generous compensation is also a way to ensure that your existing employees do not leave your business and se ek employment elsewhere.As a result, employee turnover is reduced, and loyalty of employees to the company is bolstered. We are also aware that quick turnover of employees means the company would have to incur costs on hiring and training new employees. In the long run, if you manage to keep your employees loyal to you through a well-developed and implemented compensation plan, you will be saving on these costs.Compensation boosts employee performance and productivity. A well-compensated employee is a more productive employee. And we are not just talking about the output here, but also the personal and professional development of the employee, both as an individual and a member of the workforce.By providing compensation, you are boosting their morale and satisfaction, so they have better attitudes when it comes to work.In the same vein, compensation also facilitates movement within the organizational structure. More employees will be motivated to turn in their best performance, in t he hopes of going up the ranks. Thus, the organizational dynamics will be more synergistic.COMPONENTS OF AN EMPLOYEE COMPENSATION SYSTEMCompanies have the freedom to design their own employee compensation system, provided they also comply with existing legislation and regulations.When designing a compensation system, there are components that must be included, in order to ensure that employees get fair compensation.Job description. The job description will establish the various aspects of the job, such as the duties and responsibilities it entails, the functions that must be performed, the location and environment where the job will be performed, and what are expected of the person that the job is assigned to.Job analysis and evaluation. Through interviews, surveys and questionnaires, the job descriptions are analyzed in depth, to spot any redundancies. There is also a need to evaluate the jobs in order to determine the appropriate amounts of compensation, or compensation ranges tha t will apply to them.Salary surveys. Market data on salaries and compensation will also be taken into consideration. Industry or market information, such as inflation rates and other statistical indicators, will come into play when determining compensation levels. This is also one way of remaining competitive, as competition among businesses also extend to the obtaining of talent or skill sets.Company policies and regulations. Always, always, take existing legislation into account, but you must also consider the policies within the company. This is so you can avoid possible contradictions or conflicts of interest later on.BASIC COMPONENTS OF EMPLOYEE COMPENSATIONLet us now take a look at the two basic components that make up employees’ compensation.A. Guaranteed payThis refers to the fixed monetary reward paid to an employee. Often, it is also known as the base pay or base salary. This cash reward is determined and paid on an hourly, daily, weekly or monthly basis. Other companies even do it on a bi-monthly basis, depending on the existing company policies.It is a fixed amount, which means that the same amount of base salary will be paid by the employer to the employee every end of the pay period, unless the employee is promoted, or there has been a raise in the fixed rate due to a change in policy.In many countries and states, there is a defined minimum wage. Companies comply by adopting this minimum wage in its job pay program or plan, which is structured according to the job descriptions. Usually, the employee on the lowest rung of the ladder or hierarchy will have the minimum wage as his base salary, with the base salary increasing as we go up the organizational hierarchy, mostly based on skills, experience, and nature or description of the job.In many cases, allowance also forms part of the guaranteed pay, the most common example of which is the cost-of-living allowance (COLA). This is often given to employees who have to be uprooted from their place or country of residence to work in another place.And, as the name implies, this pay is guaranteed, meaning the employee will receive this amount while he or she is in the payroll.B. Variable payCompared to the guaranteed pay, the variable pay is not fixed and not guaranteed. It is also paid in cash, but it is contingent on certain conditions, such as the discretion of top management, the performance of the employee, or the results or output achieved through the employee’s efforts.One of the classic examples of a variable pay is commissions or sales incentives. In this type of payment system, an employee will receive a percentage of the amount he has sold. For example, a car salesman will get a certain percentage of every car he managed to sell. Real estate agents also get 50% of the gross amount of money they manage to bring into their agency from closing a real estate deal.Overtime pay is another example of a variable pay, since it will depend on the number of hours worked overtime . Bonuses also fall under this category. For instance, a company may decide to give bonuses to the members of its sales team if they manage to surpass a specific amount of sales for the period.The laws on employees’ compensation (and benefits) generally differ from state to state, since they are mostly governed by state laws. Granted, they are all generally the same in concept, but it is in the small details that you can spot differences.

The Joy Luck Club Summary - 1138 Words

The literary criticism, â€Å"Language as Barrier and Bridge in Amy Tans The Joy Luck Club† is written by Mohamed Samir, who is from Faculty of Philosophy department at the University of Vaasa. He enforces the point that despite that the mother’s have strong roots from China, their daughters through being raised in America, on the other hand, are disconnected. Hence, the daughters are yet to discover their racial identity, but through an honest effort made by their mothers they are guided towards uncovering it. He argues that despite linguistic barriers and challenges in cultural translation which are thought of the be as the barriers, it is possible to pass on one’s heritage to the ongoing generations through the means of storytelling,†¦show more content†¦To exemplify, Jing Mei states â€Å"These kinds of explanations made me feel my mother and I spoke two different languages, which we did. I talked to her in English, she answered back in Chinese† (23). The author maintains the point that Jing Mei’s sense of picking up Chinese words here and there is very weak. She cannot comprehend and absorb information related to her mother tongue that is spoken and heard in her daily life. Furthermore, when Waverly has a conversation with her mom about always bragging about her, the mother responds, â€Å"So shame be with mother? Embarrass you be my daughter?.† The author asserts that the mother’s prepositions, subjects, and articles are not used in their speaking, making their English sound incomplete. However, English is their second language, so it is justifiable. Relating to this, many words in Chinese have no translation in English. This makes the mother’s seem uneducated as if what they are saying is useless to acknowledge, causing their daughters to regard them with stupidity in a dominant American society. Nevertheless, they do carry knowledge and wisdom which is underestimated by their daughters. The daughters face challenges in cultural translation leading to cultural differences. To exemplify, after Jing Mei’s mother dies, she realizes that she does not even know the significance of the jade pendant, whichShow MoreRelatedSummary Of The Joy Luck Club 853 Words   |  4 PagesExam Project Process Check #1 Book: The Joy Luck Club Author: Amy Tan By: Bala Sundaram Themes: A) The Joy luck Club presents a couple of themes but one of which, relates to an issue that is affecting many immigrant families who bring up their kids in foreign countries. 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The Effectiveness of Advertising a Literature Review

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The object of investigation is the message itself containing different signs that can be interpreted according to a preestablished intention, without reference to the consumer and the influence on the consumer behavior. This approach is useful especially in the context of advertising creation. Authors assess the effectiveness of advertising i n reference either to the language of the message (Barthes, 1964; Durand, 1964) or the graphic image of the message (Eco, 1979; Mick, 1986; Scott, 1994). However, they analyze the quality of message from the viewpoint of its construction, its presentation and the place of the communication process. The impact of the message on the recipient is a minor problem in the process of the message evaluation. This is an important limitation to the semiotic approach in terms of marketing. Communication in general and advertising in particular, were treated by psychologists starting from the motivations of recipients, which occupy a central position in the analysis. This is because of their influence on the perception of the recipient (Mittelstaedt, 1990). They believe that the motivations drive consumer behavior. So the purposeShow MoreRelatedAdvertisement Effectiveness992 Words   |  4 PagesIntroduction: Advertising is a form of communication used to encourage or persuade an audience to continue or take some new action. Most commonly, the desired result is to drive consumer behaviour with respect to a commercial offering, although political amp; ideological advertising is also common. The purpose of advertising may also be to reassure employees or shareholders that a company is viable or successful. 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Find Out Who is Worried About Common App Essay Topics and Why You Should be Listening to Them

Find Out Who is Worried About Common App Essay Topics and Why You Should be Listening to Them The most frequently encountered paper writing service that the majority of our clients require is essay writing. A huge part of the Common App is, naturally, the essay. Even if you're only a junior finishing up your very first semester, it's never too early to start contemplating your Common App essay. Make certain you connect the significance of the activity to a specific experience or story to provide the essay direction. Every applicant have a special story. You don't need to have had that kind of experience to compose an excellent college essay. An admissions officer is significantly more likely to bear in mind an applicant who has a rather specific essay written in a special and quirky way. If it's the first time you're likely to use our article writing service, you most likely have a great deal of questions. Write about a problem which you have or would like to address. Don't neglect to explain why the issue is significant to you! For this question, don't be scared to think outside the box. Regardless of what topic you select, allow some time for extra editing. The internet process for the Common Application can be hard, but it is a good deal better than applying to every school individually (which is terribly time-consuming and may lead to errors). To make certain you will locate a complete answer to every question, we've got a support team that's always online. Perhaps most of all, don't neglect to entirely answer this multi-stage question. If you require the inspiration to compose your own application essay, take a look at our Common App essay examples which should jump-start your writing. Our assortment of Common App Essay Examples may also help you choose which information to put in your essay, and keep your word count down. Two new essay options are added, and a number of the previous questions are revised. Always bear in mind the function of the Common Application essay. These seven sample essays respond to a selection of thought-provoking questions. You'll observe a similar structure in several of the essays. Colleges can tell whenever your essay is only a form essay. Please be aware that a few of these college essay examples could be responding to prompts that are no longer being used. Strength Most superheroes are well-known for their extraordinary strength. The world is full of big numbers. Your stories aren't debatable. You may even be in a position to read examples from previous students to acquire your creative juices flowing. If You Read Nothing Else Today, Read This Report on Common App Essay Topics It's very useful to take writing apart as a way to see just the way that it accomplishes its objectives. Meeting deadlines is important in the college application procedure, while it's the very first time around or as a transfer. Tell our experts what sort of homework help on the internet you will need to get. Every student necessita tes help with homework from time to time. For instance, a thriving applicant wrote about his work for a teaching assistant at a regional elementary school. The admissions officer isn't seeking the story with the majority of sauce. If you've already graduated from college or university and are trying to find a fantastic job, you will need to get a persuasive resume to impress your future employer. As NYU students will say, constructive debate of ideas is integral to life on campus and something which is emphasized in the necessary coursework students are requested to finish. Explain your commitments, and you'll be the type of student colleges find immensely attractive. It is going to change you. Colleges are more inclined to admit students who can articulate certain explanations for why the school is an excellent fit about them beyond its reputation or ranking on any list. Naturally, many colleges have their very own unique applications. The Tried and True Method for Common App Essay Topics in Step by Step Detail So you don't actually wish to locate a topic! Select a distinctive topic that others may not think of, and whatever you select, make certain you know a lot about it! Our topics are good since they won't leave listeners indifferent. In general, there's no single correct topic. For example, you can zoom in on one specific component of your background and identity and the way it informs the manner in which you look at and approach certain things. On the flip side, in the event that you made a very good choice, focus on what influenced you to make that decision and the way it has changed you. Attempt to conclude with an illustration of the way the failure improved the manner in which you deal with similar situations now. Various things to various individuals, since the situation demanded. Common App will limit the quantity of words that you may use to a few hundred. Don't forget that the Common App offers you creative license. You will be pleased to be aware that the Personal Statement prompt alternatives for 2016-2017 are the very same for 2015-2016. Go to my site for more info.

Gustav Holst Analysis free essay sample

The two movements I focus on In my analysis are the first movement: Mars, and the third movement, Mercury. Mars Mars is the first movement of the suite and it starts with a bang. A slow, ominous intro begins with the sound of snare drums being played in the background. Soon the horns greet the drums, creating an immediate feeling of danger within the first movement. The powerful tones by the strings section set for a very dramatic, almost inhuman feel, to the movement.It continues to build until it reaches a point and then drops back down, Just setting Itself up for another build even stronger than the iris. The horns then come In utilizing bursts of noise backed by deeper brass instruments. It leaves you constantly waiting for the crescendo but it keeps building, once again giving a larger than life feel to the piece. The feeling of war in the first movement is definitely tangible as you listen. We will write a custom essay sample on Gustav Holst Analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page You can almost picture the battle going on in front of you as the movement provides a background to the true war to come. According to an analysis I looked up the first movement also utilized triads moving by chromatic steps without any true purpose (Curfew Sons). This, to me, almost rather established the feeling of war, which in a way itself is controlled chaos. The music moves in a rhythm that represents both beauty and menace. I felt as though this was supposed to display the contrast of war, and the poetic beauty that comes with something so heinous. Mercury The third movement, Mercury, comes fleeting Into the scene as If it was flying itself.This Is extremely appropriate since Mercury, In Greek Mythology, was a winged messenger. Flitting to and from different places. That sensation of flying, quickly, back and forth from place to place is exactly the sentiment felt in this movement. The eight, quick strokes of the violin in the beginning almost give the feel of someone sneaking, or scurrying off into the night. The quick climb of the flutes makes one feel as though they are watching something fly into the sky, with the heavier, darker, notes that follow representing an enemy following close behind.There is a feeling of imminent danger as the movement goes on, yet the constant change between light high notes, and heavier dark ones, makes It feel as though the person being chased isnt aware of whats happening. According to misclassification. Com, the contrasting of rhythms is something Holds utilizes in many of his works. Although this is the shortest movement of the suite, it makes sense because so much is happening in the short amount of time it is performed. It also sets the next movement up very well for whatever direction Gustavo wanted to take the piece. You feel as though there can be a more Joyous, upbeat movement following this one; or even a darker, heavier movement which represents a darker side coming into power. Gustavo decided to go with a more upbeat, almost triumphant, feeling movement to follow it up, however there was still many more emotions to be displayed in the coming movements.

Augustus Caesar and his rise to power essays

Augustus Caesar and his rise to power essays Augustus Caesars rise to power and transformation of the Roman Republic into the great Empire was able to happen because of his great ability to gain support from his military soldiers, the senate, and the people. His relationship with each varied, but ultimately lead to him becoming known as the creator of the Roman Empire. Through the gaining of well timed support from the senate, and retaining popularity with his army and the people he was able to gain the political power needed in order to give Rome the opportunity of changing into the Empire it came to be. Augustuss mass approval from the senate was the main reason how he gained enough power to take Rome to the next level and fully solidify it as a world power and one of the greatest Empires in world history. Augustuss speeches to the senate, was one of the ways in which he gained the respect as a leader. Having attained my highest hopes, members of the senate, what more have I to ask of the immortal gods that I may retain the same unanimous approval of yours to the very end of my life (page 53, DWP). He was also quite modest in receiving titles and accolades from the senate and by the people. By refusing titles early in his political career, he was perceived to be honest and his intentions to be in the best interest of the Republic and not his own power. However when he did accept the titles given to him and once he saw his power growing, this is when Augustus began to change Rome from the Republic it had been, and into the Empire it is most notably remembered for. The senate remain ed intact and still acted as it did during the past, but unless it gained the approval of Caesar, actions by the senate did not take place. And if someone was elected but was not seen fit to hold the position in the eyes of Caesar than that person would not hold office....yet he took care that no persons should hold office who were unfit or elected as the r...

To the Top of Mt.Everest (Valley of the Dolls) essays

To the Top of Mt.Everest (Valley of the Dolls) essays To The Top of Mount Everest... In 1966, Jacqueline Susann published The Valley of the Dolls ; one of the three outstanding novels she wrote before her death in 1974. Set in New York City, this novel takes us through the incredulous decline of three girls seemingling perfect lives; Anne Welles, Neely OHara, and Jennifer North. Anne Welles, the center character of this novel, moves to New York to escape a solid, orderly and planned life in her home town of Lawrencville. Upon her arrival in New York, she discovers that everyone seems to be hagridden with the idea of the perfect life and many consider her daft for leaving a place where such a thing is provided for you. She feels confident at first but more and more throughout the story her whole world is turned upside down and she feels as if she is alone in a world where no one hears her or even cares what she has to say. The overall atmosphere of the novel begins as hopeful...but ultimately becomes dismal yet eerily pacifying; in that you accept her life for what it has become, as she does. Jacqueline Susann certainly keeps one wanting more throughout this novel; she never gives to much away at once, yet tells just enough so that it is impossible Anne Welles is unmistakably the most crucial character in this novel. Her story is a very sad one to tell. At just 20 years old she left everything she had ever known(and despised) and took off to New York City to pursue her dream. Her dream was simple; to make it on her own and never to settle. Anne was beautiful, which people particularly noticed as hers was not a typical beauty. She was modest in the way she dressed, plain dark linen, and minimal jewelry, as opposed to outrageous platforms and pompadours that women in that time adored. She had light blonde hair that she let ha...

Pros and Cons of using open source software to secure your network Essay

Pros and Cons of using open source software to secure your network - Essay Example This is so to guarantee unlimited access to derived works by original contributors. Examples of open source software in the contemporary world include the operating system Linux, Firefox, GIMP, Sugar CRM, Vtiger, Zurmo, and Suite CRM. People generally develop open source software to gain recognition and plaudits, enhance the product and to increase its longevity (Feller, 2005). With the huge number of organizations, governments and businesses using open source software such as the ones listed above, it has become evident that the free/ fair/ lower prices of the software is not the only advantage the use of these software bring. Along with reduced cost of spending and management of such software, there are a plethora of other benefits concerning the use of open source software. The first of these benefits is the superior security that is associated with open source software. An instance that proves this higher security status is a recent happening where coverity of numerous defects of the Android kernel was discovered. The only reason this discovery was possible is because the kernel code is open to the view of the general public. Basically therefore, the implications of open source software is that the more people who can see and test a set of codes, the higher the chances that flaws will be discovered and quickly corrected. This is what is termed the Linu x law which asserts that, given sufficient eye balls, all bugs are shallow. Open source software kinds are continuously evolving and upgrading the system. The markets appreciate product robustness and open source software facilitates a larger market of early adopters (compared to those of closed source software/ proprietary kind) who actively aid in debugging the software. In essence, therefore, open source software grows much faster in the early stages of development/ introduction into the market (Feller, 2005). Closed

Morbibity and mortality by race in US by agesexand location Essay

Morbibity and mortality by race in US by agesexand location - Essay Example The report from CDC presented detailed 2005 data on deaths and death rates according to a number of social, demographic, and medical characteristics. The data provided information on mortality patterns among residents of the United States by such variables as age, sex, Hispanic origin, race, marital status, educational attainment, injury at work, state of residence, and cause of death. Information on these mortality patterns is important for understanding changes in the health and well-being of the U.S. population Mortality data in their report can be used to monitor and evaluate the health status of the Nation in terms of current mortality levels and long-term mortality trends, as well as to identify segments of the U.S. population at greater risk of death from specific diseases and injuries. Differences in death rates among various demographic subpopulations, including race and ethnic groups, may reflect subpopulation differences in factors such as socioeconomic status, access to medical care, and the prevalence of specific risk factors of a particular subpopulation. Based on the statistics as of 2005, there were 2,448,017 deaths were reported in the United States according to the death certificates state agencies received and filed. Life expectancy at birth remained the same as in 2004- 77.8 years. Age-specific death rates decreased fo

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.