Tan
KUCHING: The dreaded Goods and Services Tax (GST) is finally here and consumers are bracing for the effects of its implementation.
A worker in the financial sector, who wanted to be known as Tan, observed that inflation would go up and that some unscrupulous businesses would take advantage of the situation to raise prices.
“However, I expect enforcement officers will come down hard on these businesses because the government is already under a lot of criticism for GST and other issues over their implementation,” he said when met yesterday.
He added that people would also control their spending on non-essential goods initially, but the situation would return to normal after a few months.
“Savings will be less but overall, the minimal taxable income will rise from the current RM2,500 to RM4,000.
“Impact on the lower income group is not expected to be too hard because they already saved on personal income taxes. GST generally doesn’t apply to most essential items like rice, oil, sugar and flour,” he added.
Despite not having much knowledge on the mechanics of GST, Tan however hoped to see lower prices or no GST applied to medical insurance, services and medicines.
“No one chooses to get sick,” he said.
Contractor Madden Fidz, who has two school-going children, also agreed that wise spending habits was important for the long-term.
“We have to be mindful of our spending. Obviously, we can’t eliminate spending on essentials like foods, household items and bills but we can cut back on non-essential items, gadgets, entertainments or services,” he said.
Madden admitted not knowing much about GST, only what he had read on official GST website.
“The market could slow down for a while in the beginning as people try to absorb and adapt, but I anticipate Malaysians will continue to spend thereafter,” he said.
Madden hoped to see lower prices of most basic food items including canned food because these were essentials to every household.
Meanwhile, secretary-general of Sarawak Entrepreneurs Association (SEA) Michael Liong said that family spending would need to be adjusted as certain essential items would become more expensive.
“However, we still need to wait and see. Of course spending realistically, not keeping too many stocks, and taking advantage of any promotion are among ways to keep in budget.
“I believe there will be some kind of impact on households in the beginning as we are all feeling anxious now. But we still need to spend especially on essential items,” he added.
He reckoned that businesses would definitely come up with various marketing strategies to gain consumers’ confidence and get the market going.
Liong predicted that the market would slow down in the next six months because businesses needed to adjust and people needed to adapt to the new system.
“But it will eventually bounce back when the dust has settled,” he said.
Liong, like many others, were unsure about the mechanics of GST, but his association had discussed the issue through a forum held with related government agencies last week.
“It is different thing to different people – for consumers, for industries, for entrepreneurs and so on,” he said, adding that those interested could look up www.joinsea.org to join its training programme.
Liong hoped that the tax rate would not increase in the next five years to allow ordinary folk to adapt to the new system.
“Also, I think everyone is hoping for lower prices of petrol, education and daily necessities,” he added.