By KEVIN WONG / Pic By MUHD AMIN NAHARUL
Malaysian consumers are more optimistic with the country’s economic outlook following the zero-rated Goods and Services Tax (GST), based on a survey by Nielsen Malaysia.
The survey — which polled more than 1,000 Malaysians between the ages of 18 and 64 from Peninsular Malaysia and East Malaysia — found that the majority of consumers believe the economy will improve with the new 0% GST.
“While Malaysians were initially tentative toward the introduction of GST three years ago when the tax was first announced, having experienced the effects of GST over the past three years, they appear to welcome the move to effectively eliminate the tax.
“Perhaps, due to the gradual increase in the cost of goods and services that has occurred since its implementation, as reflected in the Consumer Price Index,” Nielsen MD Raphael Pereda said in a statement yesterday.
“This optimism from Malaysian consumers could mean good news for manufacturers and retailers, with consumer spending intentions likely to rise — which could result in increased sales.
“At the same time, data showed that two out of three consumers expect their purchase habits to change following the reduction of GST,” he said, adding that close to one-third of respondents stated they would spend more money on essential items.
The survey revealed over half of the consumers expect the price of goods and services to decrease, while one-third believe that prices will remain the same.
The survey revealed Malaysians would be more willing to increase their spending on non-essential purchases such as holidays or leisure trips (33%), new property (27%) and out-of-home entertainment (26%).
One in four consumers (25%) also said they will be able to channel their money toward paying off debts once the GST is zero-rated.
Pereda added that Malaysian retailers have been providing consumers with discounts even before the zero-rated GST was implemented to encourage consumers not to postpone their festive spending.
Meanwhile, the Nielsen survey also showed that three out of four consumers (77%) view the government’s initiative to fix the price of fuel as being “good for consumers”.
“It is clear that the recent policy announcements made by the government have gained the approval of a vast majority of Malaysians.
“We are eager to see if this post-election optimism translates into actual consumer spending, which we will be able to determine over time through our retail data.
“In addition, Malaysians are currently enjoying a three-month tax holiday before the Sales and Services Tax (SST) is implemented on Sept 1.
“This may encourage spending now in anticipation of the impending SST,” he said.
Pereda added that Nielsen will be working closely with manufacturer and retailer clients to measure consumer sentiment and assess any impact on consumer spending over the coming months as details on this new tax are released.