Wednesday, September 23

Many still uncertain of impact as GST comes into effect

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KUCHING: April 1 marks the day the Goods and Services Tax (GST) comes into affect, and as far as the average residents are concerned, a time to proceed with caution and see how it affects them in practice.

When it comes to information regarding GST, it is all quite general, said lecturer Shin Yi.

“I think a lot of people, including myself, don’t necessarily have a firm understanding of GST. Everyone assumes everything will get more expensive as we can see how crazy supermarkets are recently,” she told The Borneo Post yesterday.

She pointed out that in theory, certain goods should go down in price but she remained skeptical.

“It would be nice if that happened. Proprietors most likely will use the GST excuse to hike up their prices, even if they aren’t registered. I was told by a bakery owner recently that they may have no choice but to increase their prices (even though they are not registered), if the suppliers choose to increase their prices. Anyway, it’s a consumption tax so I’ll learn to be more careful with my spending and adapt.”

Peggy Wong, an architect, believes that some things will go up in price, while others go down.

Everyone seems to think that it would have a snowballing effect where the six per cent keeps piling up as it works its way down the distribution line, she said.

“It’s not really a case of one guy charging the next one an extra six per cent, and the second guy adding a six per cent when selling to the next,” she said, adding that people will probably understand it better when they see it in action.

Charles Liew, a lawyer and entrepreneur, expects the economy to take a hit, citing how Japan went into recession during the first round of sales tax implementation, which was a mere three per cent.

“I expect a downturn. I expect this negative sentiment to flow through every sector. I am excited, don’t get me wrong, because it would mean opportunities for investors (like myself) to potentially pick up bargain properties and bargain stocks in the later part of the year once the effects of GST become full blown.”

Liew spent 10 years in Australia immersed in an economy boosted by GST.

“And being in business, I’ve attended plenty of talks and seminars about the GST. Having said that, these talks were done by people who have no GST experience… so basically it’s like listening to a business lecturer who has never done business himself or herself!”

He was aware of a complaint channel which explains why many people think the implementation of GST would not be perfect.

“In fact, far from it. I do know that we have two years to ‘make mistakes’ as businesses, which I think is helpful and much needed.”