Consumers to take advantage of 3-month tax holiday until SST is re-introduced on Sept 1
By FARA AISYAH & ALIFAH ZAINUDDIN / Pic By AFIF ABD HALIM
Consumers who have held back on shopping pending the dismantling of the Goods and Services Tax (GST) are now expected to boost retail spending by more than RM10 billion following the government’s announcement of a three-month sales tax holiday.
Mydin Mohamed Holdings Bhd MD Datuk Dr Ameer Ali Mydin said consumers have held off purchases, especially of big ticket items, when the government announced on May 16 that the GST will be zero-rated from today.
He said they will now spend to take advantage of the tax holiday until the Sales and Service Tax (SST) is re-introduced on Sept 1.
Ameer said based on past GST collection, a RM10.8 billion worth of “pent-up demand” and increased disposable income will raise the sales during June to August.
“That means whatever you bought at Mydin at RM10.60 previously has become RM10 now. Because there is no more 6% GST to be paid, consumers have an extra RM3.6 billion to spend a month, which means an extra RM10.8 billion in the three months.
“Businesses should at least benefit as much — with that amount of money in the market — if not more,” he told The Malaysian Reserve (TMR).
Ameer said the figure was based on the government’s RM43.8 billion GST collection last year. He added that from an economic standpoint, when there is RM3.6 billion in the market, it will circulate 10 times from consumers to retailers to suppliers and transporters, hence, benefitting the whole ecosystem.
He also expects businesses will theoretically grow by 4% to 5% during the three months, compared to the same period last year, due to an improved consumer confidence, in addition to the ringgit stabilisation at the current rate.
Adrieana Dennison, who lives in Ampang, said she expects prices to be lower with the zero-rate term taking effect.
The 30-year-old secretary said this would allow consumers tospend more on household items per shopping trip at supermarkets.
“It is also a good Hari Raya gift as the tax abolishment is done in time for the festive season. This will definitely allow the people to increase their spending and be more flexible with their budget.”
However, she remains sceptical that all retailers will abide by the new regulation.
“Some sellers may maintain their prices even after the GST has been zero-rated. As consumers, we must be vigilant about this,” she added.
Ameer also voiced his concern regarding the zero-rated GST implementat ion for small retailers.
“When GST was implemented, we had more than one year to educate everyone, but now we were only given two weeks.
“The process of education needs to be done for small retailers like sundry shops because theoretically, the price of goods must be reduced.”
However, he added that some businesses, including car park operators, which had absorbed the 6% GST previously might not be able to reduce their prices.
Maryam Zainudin, 26, also expects to see at least a 6% reduction on prices of goods and viewed this as a relief for those who may not receive any bonus payments for the upcoming festivities.
Maryam, a teacher in Bangi, said the GST had been a burden to Malaysians especial ly those in the lowincome group.
“The GST made buying basic necessities unaffordable. Without it now, I hope Malaysians can buy their basic needs without worry. People deserve that.”