THE public is looking forward to the removal of the 6% Goods and Services Tax (GST).
Those interviewed by MetroPerak hope the abolishment of the GST would see prices of goods lowered accordingly.
A teacher who only wants to be known as Mira, in her 40s, said she is optimistic that prices of certain goods will go down.
“With the new Federal Government, I think it can be achieved.
“I really look forward to hearing announcements or seeing the reduction in prices of goods in the future,” she said.
“It is what most people want. To see the prices of goods being sold at an affordable level,” she added.
Prime Minister Tun Dr Mahathir Mohamad announced last week that Pakatan Harapan would be going ahead with removing GST, replacing it with the Sales and Service Tax (SST).
In its manifesto, Pakatan promised to abolish GST within 100 days.
It was reported that the GST collection in 2017 was about RM42bil and expected to increase to RM44bil this year.
In comparison, the SST collection in 2014 was RM17bil.
Businessman Lai Khee Fatt, 37, said it was for the best if the government could really do it.
Lai, who is in the food and beverage industry, said the abolishment of the GST would automatically see goods being sold 6% cheaper than the current price.
“I think reduction can go beyond 6% because GST has other hidden costs such as administration and accounting fees,” he said, adding that the GST accounting fees for his business alone was about RM3,000.
“But for some eateries that are not charging the tax, then I do not think they will reduce their prices,” he said.
“Certain small businesses such as hawkers try to work around it and avoid paying GST,” he added.
Lai also said he felt that many businesses have already adapted to the GST since its implementation in 2015.
He hoped the Government could cope with the abolishment of the tax.
“In terms of the economy, RM40bil is no joke. If the government can find some other way to get the money, then the GST can be abolished.
“Otherwise, it will have an impact on the country’s economy,” he said.
“I think it is actually a good model for sustainable income for the government but a burden to the people with low income because they are badly affected,” he added.
Lai said most businessmen do not mind contributing to the government but they want to see transparency.
“Most of us want to know how the money is spent,” he said.
Factory manager CC Lum, in his 40s, said it was more important for raw material suppliers to reduce the prices of their goods first.
He said for manufacturing plants, the prices of its products were mainly affected by the price set by raw material suppliers.
“When the GST is cancelled, we hope the prices of raw materials go down too.
“As the production cost goes down, so will the products,” he said.
“But if they do not lower the prices, the prices of products will remain the same so I hope they reduce the prices for raw materials,” he added.
Lum said his business was not affected by the GST as he mostly dealt with exports.
“The GST affects the end users more.
“For any local business, it is important that they pay the GST first and claim later. If the amount is a lot, then it could affect cash flow,” he said.
“But for businesses that do not have cash flow issues, then it will not have any impact,” he added.
However, a trader who only wanted to be known as Leong, in his 60s, said he was sceptical that the prices of goods would go down after the abolishment of the GST.
“For hawkers, traders, retailers or other small businesses, I doubt they will reduce their prices.
“As a businessman, it does not make sense to do so,” he said.
“But maybe perhaps, the bigger companies or manufacturers can afford to do it,” he added.
Leong also said he hoped that with the abolishment of the GST, the government could reintroduce the subsidy for several items, including cooking oil, petrol and sugar.
“Perhaps they could also continue to subsidise price-controlled items such as rice, poultry, meat and other daily necessities,” he said.
“But I think it is more important for the government to find a way to strengthen the ringgit.
“This will also help to reduce the prices of goods,” he added.