Goods and Services Tax (GST) : 6 percent GST

Goods and Services Tax (GST) : 6 percent GST

In the next year, the Malaysian government plans to issue GST at 6 percent.  I have several thoughts on this new tax.

It seems that Malaysia is entering some economic difficulty stemming from poor revenues towards the end of the year.  Generally both consumers and companies are cutting back.  I'm actually surprised that this is the case for Malaysian consumption because like many others, I've done a lot of durable goods purchasing over this year in anticipation that if I didn't buy the big ticket items, I would have to pay 6 percent more next year.

We should expect to see economic weakness NEXT YEAR.  Not this year.  Unless the next few months see an explosion of goods purchased, it's almost guaranteed we will hit an economic slowdown next year.  We haven't had the GST implemented and already the economy is having difficulty.

The 6 percent is actually extremely high.  Malaysia should rethink their rate.  Singapore introduced a 4 percent GST their very first year of implementation and only after some years of the tax regime, moved GST to six percent.

Next year will be tough slogging for many Malaysians.  Any income tax reduction from the government to offset GST won't make up for the increased cost of living most will face. 

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