Carbonated Beverages and Dental Caries

Carbonated Beverages and Dental Caries An assessment of association between carbonated drinks consumption and dental caries prevalence: A cross-sectional study Zainab A. Sukhera[1], Syeda Mehar Raza1, Neha Rana1 and Tehreem Zafar1. Dental caries may be defined as â€Å"a bacterial disease of the hard tissues of the teeth characterized by demineralization of the inorganic and destruction of the organic substance of tooth†.(1) It is the most prevalent oral disease worldwide.(2) It is a multi-factorial disease caused by the interaction of three principal factors; a susceptible host tissue, cariogenic micro flora and diet.(3, 4) Diet especially refined sugars, is an important etiological factor of dental caries. Both the frequency and the total amount of refined sugars consumed play a significant part in the etiology of caries. â€Å"The evidence establishing sugars as an etiological factor in dental caries is overwhelming†.(5) Sugars are mostly contained in manufactured food and beverages and form an essential component of human diet.(6) Most carbonated beverages contain up to 10 tea-spoons of sugar per 12 oz. as opposed to 1-2 tea-spoons in fruit juices.(4, 7) Despite the differences in carbohydrate content, both seem to have similar cariogenic potential.(8) In addition to the high amounts of sugar, carbonated beverages also contain phosphoric, citric and carbonic acids which show a deleterious effect on enamel.(9, 10) Caffeine, which makes up a considerable portion of carbonated beverages, is a mildly stimulant drug and it may contribute to the tendency for frequent consumption of such beverages. All the aforementioned factors are responsible towards the rapid initiation and progression of caries.(11) Diet drinks which use artificial sweeteners instead of refined sugars have been popularly used in order to reduce the caloric content. Although diet drinks are considered less cariogenic than regular beverages, their greater erosive ability and the use of artificial sweeteners do not make them a healthier alternative. (12) The Aim of this Cross-sectional study was to assess the association between prevalence of dental caries and carbonated drink consumption in a population of 12 to 19 years old children from Islamabad and Rawalpindi. Materials and Methods: A questionnaire-based cross-sectional study was conducted at the Islamic International Dental Hospital, Islamabad during the month of June. The study comprised a questionnaire survey followed by a visual oral examination. Sample: The participants comprised a convenience sample of 12-19 years old adolescents who were visiting the hospital at any time during 16th to 20th June. 1st year BDS students who fell in the above mentioned age bracket were also included in the sample. The participants were mostly residents of Islamabad and Rawalpindi. Sample size was chosen to be 50. Verbal consent was obtained from each participant and his/her guardian beforehand. Questionnaire: A questionnaire was completed through a face-to-face interview with each participant which helped in achieving a 100% response rate. The Questionnaire consisted of three sections. Section A dealt with the oral hygiene habits and the beverage consumption habits of participants. In Question 1, the frequency of intake of different beverages was recorded by using a scale of 5 values; Never, Rarely, Once a week, 1 glass daily and 2 or more glasses daily. In the next set of questions, the participants were asked about (Q2) their preferred time of drink consumption (at mealtimes or between meals); (Q3) their preference of either regular or diet drinks and (Q4) the use of straw. Questions 5-7 assessed their oral hygiene knowledge. Section B dealt with the socio-demographic details and section C recorded the DMFT score of each participant. Clinical Examination: After the interview, each participant was orally examined by a 2nd year BDS student. The examination took place under a tube-light with the participant seated in a normal chair. No mouth mirror or CPI probe was used to assist in the diagnosis of caries. Only a tongue depressor was utilized by the examiner. The severity of caries was assessed via the DMFT index. A tooth was considered decayed (D) if a carious lesion was visibly appreciated; missing (M) if extracted due to caries and filled (F) if a restoration was seen. A restored tooth with recurrent decay was also counted as (D).(13) Data Analysis: Statistical Package for Social Sciences (SPSS) Version 17.0 was used to enter, organize and analyze the data. The effect of different variables; frequency and time of consumption of drinks, demographic factors and oral hygiene habits on the DMFT scores of participants was analyzed by deriving frequencies, means and standard deviations. Results: Results were obtained for the sample of 50 participants by analyzing the data from their completed questionnaires and dental examinations. The sample included 19 males (38%) and 31 females (62%). Out of the total number of participants, 15 (30%) were from the age group of 12-14 years, 14 (28%) from the 15-17 years group and 21 (42%) from the 18-19 years age group. Table 1 displays the number and percentages of participants in relation to beverage consumption and their sociodemographic details. In terms of daily consumption, milk and juices were the most popular drinks (n=35, 70%), while carbonated drinks were consumed by only 17 (34%) participants on a daily basis. In the younger age group of 12-14 years, 93% (n=14) preferred carbonated beverages whereas, coffee and juices were the main preferences of the other two groups (15-17 years, 18-19 years) being consumed by 100% (n=14) and 95% (n=20) of the participants respectively. Table 1: Frequency distribution of different types of drinks as per consumption frequency and sociodemographic factors. (n=number) Table 2 illustrates the prevalence and severity of dental caries in relation to different types of beverages consumed. Among the participants who consumed juices, 68% (n=32) had caries in contrast to the 62% (28) who consumed carbonated drinks. Caries severity for carbonated drinks was highest with almost 7% (n=3) participants having recorded DMFT of more than 4. Table 2: Prevalence and severity of dental caries in relation to consumption of different beverages. (n= total number of consumers of a particular drink. Percentage frequencies are given in brackets) Table 3 shows the effect of different variables on DMFT score including time of consumption of carbonated drinks, use of straw, drink type, oral hygiene habits and demographic details. Around 56% (n=28) of participants reported consuming carbonated drinks at mealtimes. However, their DMFT score was unexpectedly higher than those who consumed their carbonated drinks between meals (36%, n=18). Diet drinks were preferred by only 4% (n=2) of the participants and their caries experience was low as compared to those who consumed regular drinks (94%, n=47). According to the findings, 30% (n=15) of participants used a straw during consumption and had a much lower DMFT score of 1.07 ( ±1.22) in contrast to the 1.76 ( ±1.82) score for those who did not use a straw (n=34, 68%). Frequency of brushing showed a significant effect on the DMFT score by decreasing it with each increase in frequency. In terms of gender, mean DMFT score of females was higher (1.77 ±1.76) than that of males (1.31 ±1.60). Among the three age-groups, the 15-17 year age group showed a slightly higher caries experience than the other two groups. Table 3: Effect of carbonated drink related variables and demographic factors on mean DMFT score. Mean DMFT of the sample was 1.60  ± 1.702. Table 4 and Figure 1 illustrate the frequency percentage of each component of DMFT Index i.e. of Decayed (D), Missing (M) and Filled (F) in the study sample. Out of the total DMFT score of 80, ‘Decayed’ component had the highest frequency percentage (n=60, 75%), followed by ‘Filled’ (n=17, 21%) and ‘Missing’ (n=3, 4%) components, respectively. Table 4: Distribution frequencies of Decayed (D), Missing (M) and Filled (F) components in the whole sample as well as of the cumulative DMFT. Figure 1: Distribution of each component of DMFT in the sample. Figure 2 illustrates the relation of frequency of carbonated drink consumption with mean DMFT scores of participants. Participants who â€Å"Never† consumed carbonated drinks had a mean DMFT score of 2. Whereas, participants who consumed carbonated drinks â€Å"rarely†, â€Å"once a week† or â€Å"one glass daily† had mean DMFT of 1, 1.52 and 1.92 respectively. â€Å"1.60† was the recorded mean DMFT of those who consumed two or more glasses of carbonated drinks daily. Figure 2: Bar chart illustrating frequency of carbonated drink consumption per mean DMFT scores. Discussion: A strong association between carbonated beverages and dental caries has been indicated by many previous studies (11, 14-16) while a few indicate a much weaker association.(17, 18) We assessed this hypothesis by conducting a cross-sectional study in a sample of 50 participants from Islamabad and Rawalpindi. The results from our study found no association between carbonated drink consumption and dental caries experience. Those participants who had ‘Never’ consumed carbonated drinks showed the highest mean DMFT. Caries prevalence and caries severity in relation to carbonated drink consumption was high, and similar to that for juices indicating similar cariogenicity.(8, 19) Mean DMFT of those who consumed carbonated drinks ‘at mealtimes’ was surprisingly greater than of those who consumed ‘between meals’; a direct contrast with a previous study from Slater P. et al.(20) Results from the current study showed that the mean DMFT decreased with the use of a straw during consumption. This is in accordance with a study by Tahmassebi et al. which proved that if juices were consumed through a straw, there was a less pronounced pH drop in plaque.(21) Since carbonated beverages and juices possess similar cariogenic potential, the same situation might be true for carbonated beverages. Oral hygiene (frequency of tooth-brushing) had a strong effect on dental caries experience. DMFT was highest for those who did not brush daily and lowest for those who brushed thrice a day. This pattern is in congruity with the fact that despite the intake of sugary drinks, oral health is an important factor in the etiology of dental caries especially with the advent of fluoridated toothpastes.(22) Mean DMFT of females was found to be higher than that of males. This may be due to the uneven distribution of males (38%) and females (62%) in our study sample or it may also indicate that dental caries is statistically dependent on gender to some extent, as proven by earlier studies.(3) Relation of social status with beverage consumption patterns, oral hygiene, DMFT etc. could not be derived because of an error in the designed questionnaire. To check the social status of participants, we added the option of â€Å"Occupation† but neglected to specify whose occupation we were asking for i.e., of the guardian/parent or of the participant. This lead to a confusion on both the participants’ and the interviewers’ part resulting in incorrect information to be recorded on the forms. Mean DMFT of the sample was found to be slightly greater than that reported by WHO in 2003.(23) The ‘Decayed’ portion formed a major component of the overall DMFT score, followed by the ‘Filled’ and ‘Missing’ components, indicating that majority of the children do not undergo treatment due to various reasons e.g. high costs of treatment, negligence to oral heath etc. This trend was also observed in a cross-sectional study carried in Karachi.(24) Study Limitations: It is necessary here to discuss the limitations faced in our study. We employed a cross-sectional design in determining the beverage intake patterns and oral health conditions of the participants. However, use of cross-sectional data to establish cause (carbonated beverages)-and-effect (dental caries) relationship does not draw valid conclusions. Longitudinal study design should therefore, have been employed.(24, 25) Furthermore, the questionnaire that we used in our study did not provide detailed information regarding fluid intake patterns (e.g. of water).(15) Sample size and sampling technique used in our study was inadequate to cover the characteristics of the whole population of Islamabad and Rawalpindi.(26) Protocols for determining the carious lesions(27) were not strictly followed during the dental examinations. For example, a CPI probe and mouth mirror was not employed to assist in the diagnosis of caries. Radiographs were also not used during the examinations. The probability of surface stains being counted as carious lesions therefore, cannot be eliminated. Conclusion: No association was found between carbonated beverages consumption and dental caries through our findings. Dental caries was found to be associated with various other factors such as oral hygiene, methods and time of beverage consumption, gender, age, etc. Further research studies, particularly of longitudinal design, should be carried out are before any conclusive results can be derived. A more detailed dietary questionnaire should be employed to ascertain the complete dietary patterns of an individual throughout the day. Following guidelines should be followed while consuming carbonated or any other cariogenic beverages.(12) Drinks should ideally be consumed at meal times and via a straw to minimize direct contact with teeth. They should not be swirled or swished in the mouth. Tooth brushing immediately after consumption should be avoided. Neutralizing foods (milk, cheese and water) should be consumed immediately after beverage consumption. Abbreviations: DMFT = no. of Decayed, Missing and Filled Teeth; WHO = World Health Organization; CPI probe = Community Periodontal Index probe. References: 1.Soames JV, Southam JC. Oral pathology: Oxford University Press; 2005. 2.Poul Erik Petersen, Programme WOH. The World Oral Health Report 2003: continuous improvement of oral health in the 21st century the approach of the WHO Global Oral Health Programme. 3.ALI LEGHARI M, TANWIR F, ALI H. DENTAL CARIES PREVALENCE AND RISK FACTORS AMONG SCHOOL CHILDREN AGE 12-15 YEARS IN MALIR, KARACHI. Pakistan Oral Dental Journal. 2012;32(3). 4.Peter S. Essentials Of Preventive Community Dentistry: Arya (Medi) Publishing House; 2008. 5.Sheiham A. Dietary effects on dental diseases. Public health nutrition. 2001;4(2b):569-91. 6.Sayegh A, Dini E, Holt R, Bedi R. Food and drink consumption, sociodemographic factors and dental caries in 4–5-year-old children in Amman, Jordan. British dental journal. 2002;193(1):37-42. 7. : American Beverage Association; [cited 2014 10/9]; Available from: www.ameribev.org/minisites/products/. 8.Meadows-Oliver M, Ryan-Krause P. Powering up with sports and energy drinks. Journal of Pediatric Health Care. 2007;21(6):413-6. 9.Jarvinen V, Rytomaa I, Heinonen O. Risk factors in dental erosion. Journal of Dental Research. 1991;70(6):942-7. 10.Owens B, Kitchens M. The erosive potential of soft drinks on enamel surface substrate: an in vitro scanning electron microscopy investigation. The journal of contemporary dental practice. 2006;8(7):11-20. 11.Majewski RF. Dental caries in adolescents associated with caffeinated carbonated beverages. Pediatric Dentistry. 2001;23(3):198-203. 12.Tahmassebi J, Duggal M, Malik-Kotru G, Curzon M. Soft drinks and dental health: a review of the current literature. Journal of dentistry. 2006;34(1):2-11. 13.Cappelli DP, Mobley CC. Prevention in clinical oral health care: Elsevier Health Sciences; 2007. 14.Cheng R, Yang H, Shao M-y, Hu T, Zhou X-d. Dental erosion and severe tooth decay related to soft drinks: a case report and literature review. Journal of Zhejiang University science B. 2009;10(5):395-9. 15.Lim S, Sohn W, Burt B, Sandretto AM, Kolker JL, Marshall TA, et al. Cariogenicity of soft drinks, milk and fruit juice in low-income African-American children. Journal of the American Dietetic Association. 2008;139(7):959-67. 16.Sohn W, Burt B, Sowers M. Carbonated soft drinks and dental caries in the primary dentition. Journal of dental research. 2006;85(3):262-6. 17.Marshall TA, Levy SM, Broffitt B, Warren JJ, Eichenberger-Gilmore JM, Burns TL, et al. Dental caries and beverage consumption in young children. Pediatrics. 2003;112(3):e184-e91. 18.Vartanian LR, Schwartz MB, Brownell KD. Effects of soft drink consumption on nutrition and health: a systematic review and meta-analysis. American journal of public health. 2007;97(4):667-75. 19.Birkhed D. Sugar content, acidity and effect on plaque pH of fruit juices, fruit drinks, carbonated beverages and sport drinks. Caries research. 1984;18(2):120-7. 20.Slater P, Gkolia P, Johnson H, Thomas A. Patterns of soft drink consumption and primary tooth extractions in Queensland children. Australian dental journal. 2010;55(4):430-5. 21.Tahmassebi J, Duggal M. The effect of different methods of drinking on the pH of dental plaque in vivo. International Journal of Paediatric Dentistry. 1997;7(4):249-54. 22.Burt BA, Pai S. Sugar consumption and caries risk: a systematic review. Journal of dental education. 2001;65(10):1017-23. 23.Caries for 12-Year-Olds by Country/Area [database on the Internet]. Available from: www.mah.se/CAPP/Country-Oral-Health-Profiles/According-to-Alphabetical/CountryArea-P/. 24.Dawani N, Nisar N, Khan N, Syed S, Tanweer N. Prevalence and factors related to dental caries among pre-school children of Saddar town, Karachi, Pakistan: a cross-sectional study. BMC Oral Health. 2012;12(1):59. 25.Moynihan P, Petersen PE. Diet, nutrition and the prevention of dental diseases. Public health nutrition. 2004;7(1a):201-26. 26.Convenience Sampling. Available from: https://explorable.com/convenience-sampling. 27.A Textbook of Public Health Dentistry: Jaypee Brothers, Medical Publishers; 2011.

Eagle Machine Company Essay

EAGLE MACHINE COMPANY The Eagle Machine Company has fallen on bad times. Eagle, a maker of specialty restaurant equipment, has sales totaling $72 million, but sales are declining while costs continue to increase. If things continue in this direction, Eagle soon may have to close its doors. At a special management meeting, the president lays it on the line! He demands that the firm break even in the remaining quarter of the year. For next year, he calls for profits of 5 percent, a 20 percent increase in sales, and deeper cuts in labor, material, and overhead. Later in the day, the president calls Sally Stone, director of supply management, in for a discussion. â€Å"Sally, I want your supply management people to carry the ball at the start of the game. We can’t get sales moving for six months. But you can improve your housekeeping—and Eagle’s profits—right away. Just think what you can do to that chart! Every penny you save is profit! So take a close look at what you buy. I don’t care how you make your savings—by negotiations, inventories, imports, anything. But put the screws on tight—right away! â€Å"Start with inventories, they’re sky-high. So get together with manufacturing on a 10 percent cut! We’ve got $12 million worth of materials stashed away around here, and a 10 percent cut would save at least $300,000 a year in carrying charges. At the same time, get your payroll and operating expenses down 10 percent. That is in line with our companywide cutback. I know this hurts, Sally, because you’ve got some mighty fine people here in supply management, but we can’t be sentimental these days. Our overhead has got to come down—or we’re dead! â€Å"I’m having an executive committee meeting in one week. Have your plans ready by that time! We’re betting on you, Sally. Sally reports to the president, as do other department heads. Sally learns from inventory control that raw stock inventory is $12. 2 million. The marketing manager controls finished goods stocks. Sally wonders how she can deliver the cost reduction and still keep her department and supplier relations in shape for the long pull. 1. What actions should Sally take to reduce inventories by 10 percent? 2. What dangers, if any, are there in reducing inventories? 3. In what ways could the cost of goods purchased be reduced? 4. What position should Sally take on the president’s plan to reduce the supply management payroll by 10 percent?

Old Man and the Sea Essay Topics - the Conspiracy

Old Man and the Sea Essay Topics - the Conspiracy Getting the Best Old Man and the Sea Essay Topics The principal area of the story takes place in the sea. At first glance, it appears to be a simple tale of an old Cuban fisherman who catches an enormous fish, only to lose it. It is set in a small fishing village near the Cuban coast. It features a stubborn old man who used to be a great fisherman. What the In-Crowd Won't Tell You About Old Man and the Sea Essay Topics It doesn't matter to us, whether you're too busy on the job concentrating on a passion undertaking, or simply tired of a seemingly infinite stream of assignments. The thesis of this essay is that there are numerous obstacles in life that ought to be overcome. Naturally, society can be cruel and unsympathetic sometimes, but whenever faced with adversity, an individual should discover a means to play on. You should have your reasons, and our primary concern is that you find yourself getting an excellent grade. Finding the Best Old Man and the Sea Essay Topics Before he got old he was an extremely superior fisher and might catch loads of fish. The fish is strong, however, and doesn't come up. To die battling such an effective fish wouldn't be dishonorable. The marlin nibbles around the hook for some moment, refusing to select the bait fully. In the end, an individual has the ability to identify his own method of self-satisfaction. Age isn't an element in their relationship. Santiago's character is an excellent model for us. Indeed, doubts are portions of the pure mechanism of evolution inherent to each human being to pinpoint what's the ideal cause for a specific person. Choosing our service, you will realize that studying can be simple if you gain from the help of capable experts. Santiago states he isn't religious, but he's nonetheless acquainted with at least some Catholic prayers and practices. If you're searching for a wide range of books old man and the sea thesis ideas in numerous categories, have a look at this website. This isn't an instance of the work generated by our Essay Writing Service. What You Must Know About Old Man and the Sea Essay Topics Perhaps my mythology isn't right. This illustration of imagery is particularly good because we've got all cut ourselves and seen our own blood dry, so we are able to really picture this scene because of the familiar imagery. You're a metaphor for life. You're a metaphor for everyday bread. The Secret to Old Man and the Sea Essay Topics At the close of the story, it's the reader who must conclude whether he's rewarded or not. Que va, the boy says, There are several great fishermen and some fantastic ones, but there's only you. His story becomes everybody's story and, being such, becomes genuinely uplifting. The novel is quite picturesque. He comes face to face with the largest marlinof all moment. It is identical with life. Then whenever the luck comes you're ready. The movie uses 29, 000 images he along with his son, Dimitri, painted on glass over two decades. Marlin is a great rival of the novel and he symbolizes the previous chance that may be offered to people. Hemingway was well into his career right now and had lots of money yet he wasn't delighted. In any case, Hemingway demonstrates that each and every man however simple he can seem carries a fantastic luggage of philosophical views, concepts and expresses the huge scope of feelings.

The Goods Service Tax In Malaysia - Free Essay Example

Sample details Pages: 16 Words: 4754 Downloads: 1 Date added: 2017/06/26 Category Statistics Essay Did you like this example? 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"protectionismà ¢Ã¢â€š ¬Ã¢â€ž ¢ 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 there is no real incentive to compete. Don’t waste time! Our writers will create an original "The Goods Service Tax In Malaysia" essay for you Create order 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 Servantsà ¢Ã¢â€š ¬Ã¢â€ž ¢ 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 economyà ¢Ã¢â€š ¬Ã¢â€ž ¢, 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. Malaysiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s 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 ità ¢Ã¢â€š ¬Ã¢â€ž ¢s 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 GSTà ¢Ã¢â€š ¬Ã¢â€ž ¢s 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 worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s 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. Ità ¢Ã¢â€š ¬Ã¢â€ž ¢s 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 governmentà ¢Ã¢â€š ¬Ã¢â€ž ¢s 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 à ¢Ã¢â€š ¬Ã…“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 Ministryà ¢Ã¢â€š ¬Ã¢â€ž ¢s 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"unhappyà ¢Ã¢â€š ¬Ã¢â€ž ¢ 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 à ¢Ã¢â€š ¬Ã…“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 à ¢Ã¢â€š ¬Ã…“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 exe mpt small businesses 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. Malaysiaà ¢Ã¢â€š ¬Ã¢â€ž ¢s 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 Governmentà ¢Ã¢â€š ¬Ã¢â€ž ¢s 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.