Malaysians to feel the pinch from looming DST hike, says Dr Wee

PETALING JAYA: The government's decision to increase digital services tax (DST) is the latest upsetting news for consumers, says Datuk Seri Dr Wee Ka Siong.

"It is increasing by two percentage points from 6% to 8% starting March 1, on top of a slew of taxes people are going to face in the coming months," the MCA president said in a Facebook post on Tuesday (Jan 23).

He noted that DST was introduced on Jan 1, 2020 during the Pakatan Harapan administration and some irresponsible merchants took advantage by raising prices.

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"I am pretty sure prices at the Apple Store, Google Services, Netflix, Disney+ and Amazon Prime will go up; while app subscriptions and merchant offerings on Lazada, Shopee, TikTok and Grab platforms will skyrocket starting March 1.

"So I expect the increase in prices for digital services this time will go up not just by two percentage points but much higher because merchants will use the increase as an excuse to inflate prices.

"Ultimately, who will bear it? The consumers."

Dr Wee said water rates are going up 22% after recent increases in electricity bills, with new levies like low value and high value goods taxes (LVGT and HVGT) to be enforced this year.

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"The increase in sales and service tax rate from 6% to 8% and the expansion of SST scope will definitely happen simultaneously," he noted.

He also said people were already worried about the withdrawal of subsidies by the government.

"Will the consumers even have any breathing space in (this) challenging situation?

"This is my concern," he added.

It was reported in The Star that come March, Malaysians will pay more for daily living.

It said many things are expected to cost more, from leisure activities and outings to consulting a traditional or complementary medicine practitioner, with the service tax rate increased to 8% from 6%.