VESALIUS GST-Ready For Malaysia

Malaysia is set to introduce a goods and services tax (GST) effective from 1 April 2015. While it has been announced that healthcare services will be exempted, hospitals belong in a mix supplies environment, i.e. providing both taxable and exempt supplies/services.

Having been implemented in countries that apply GST such as Singapore, China and Vietnam, VESALIUS has many existing features that support this broad based consumption tax including the complexity of differing tax values for item group and item type.

Item Type Item Group Tax Value
Medication Vaccines
Medication Hypnotics 10%
Example of Tax Set-up in Vietnam Hospital

However, the Malaysian model imposes that private healthcare facilities providing mixed supplies to impose GST on non-medical or health related goods and services, where as majority of the goods and services rendered to patients are actually exempt supply.

Nova is currently enhancing the existing consumption tax features and functions in VESALIUS to meet these Malaysia GST requirements. The enhancements will be in 3 main areas:

  • Tax Rule Engine
  • Input and Output Tax Computation
  • Integration Enhancements

Tax Rule Engine

VESALIUS has a flexible and comprehensive Tax Rule engine that can be set up to meet all possible tax computations:

  • A Global Tax rule, defined in percentage, is applicable to the goods and services rendered to patients, with the exception of Exceptional Tax Rule.
  • Multiple Exceptional Tax Rules can be set-up which precedes the Global Tax rule.
  • Each Tax Rule has an effective date range which allows flexibility of preparing future and changes in tax percentage.
  • The tax method can either be inclusive, exclusive or none.
  • The tax rule can be applied at Item Type level, Item Group level, Account Type.

These features allow great flexibility for users to configure the setup or amend it as the guidelines or business requirement changes over time in the future.

Input and Output Tax Computation

Some of the new features include:

  • Setup of Tax Codes and their respective tax rates as mandated by Royal Malaysian Customs Department
  • Configuration of Tax Code for multiple suppliers per Item Code for computation of input tax in the Purchasing module
  • Configuration of Tax Code down to the Item/Service Code level for computation of output tax in the Billing module
  • Bill generation and presentation of patient Tax Invoice – goods and services are automatically tagged with the correct Tax Code and the summary of all applicable taxes

With automated computation, there will be minimal changes to the transactional functions in the Purchasing and Billing modules so users are least impacted, where they do not require re-training or adapt to changes in new workflow.

Integration Enhancements

The transactional records are logged and tracked to ensure full data integrity and accountability. The records are available for audit purpose and can be accessed by the Accounting System through the Interface Schema. This will comply with the Custom’s guidelines where the Accounting System is able to generate the GAF (GST Audit File) using the source data captured in VESALIUS’s Purchasing and Billing modules.

Apart from fulfilling the general guidelines, there are additional system checks and controls to ensure operational efficiency. For example, the patients’ Tax Invoice generated in VESALIUS cannot be cancelled by users after the Tax Return was already filed in the Accounting System.

VESALIUS will be GST-Ready by end 2014, giving hospitals ample time for the necessary setup and testing of the application and system interface to the Accounting System. During the cut-over period, the users will be assisted by experienced Nova consultants to ensure a smooth and successful rollout.

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