Abolishing GST makes ringgit and sense for Muar traders

Zikri KamarulzamanPublished: Apr 26, 2018 7:58 AM | Updated: Apr 26, 2018 12:20 PM

VOXPOP | Pakatan Harapan's plans to abolish the GST should it form the federal government after the 14th general election has been widely panned, not just by BN, but also by a number of economists who believe the move to be financially unsound.

Besides potentially decreasing funds available for government expenditure, there are also doubts whether reverting back to the sales and services tax (SST) would actually help lower prices.

But amid the hustle and bustle of the Muar Uptown night market, a group of traders believe that abolishing the GST is a business proposition worth considering...

GST 6% is not a problem here. The other issues are i) Location is not conducive, ii) Nite market open only on Friday and Saturday, iii) Too many stalls selling the same items, iii) All the customers are local, iv) No outside crowds, v) No tourist attraction. The local council cannot simply embark on something and expect instant results without in depth study. Only fools cannot tell you why Malacca Jonker's Walk is so successful and famous.

Yeap Khoon Saik03:52 PM, 26 Apr 2018

GST only benefits najib and the BN gang. And many small/old shops were forced to closed as they can't afford the cost to implement the stupid GST system, which guess who are getting the profit from.

Tang Wei Heng03:26 PM, 26 Apr 2018

I agree with Lau Zheng Zhou. That'll be the impact of SST being brought in and GST being removed. But the real size of the impact of SST, as with GST, is much larger in cumulative terms. So you're not paying 6% GST but much more. The same with SST. It depends of prices being charged downstream, then upstream. It also, as someone have suggested, depends on numerous other factors, including the ringgit's value on the x-rates. Abolishing the GST completely might help small businesses like those mentioned in this story. Prices might come down and if they do it'll be a short-term gain for consumers. Big businesses, however, will have no compulsion to pass on savings to consumers if their aggregate demand, measure by demand/supply and income elasticities, is such that they can maintain old prices. But prices will go up in the medium to long term. You can bet on that.

Yap Chun Kiat12:05 PM, 26 Apr 2018

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Yeap Khoon Saik03:52 PM, 26 Apr 2018

GST only benefits najib and the BN gang. And many small/old shops were forced to closed as they can't afford the cost to implement the stupid GST system, which guess who are getting the profit from.

Tang Wei Heng03:26 PM, 26 Apr 2018

Yap Chun Kiat12:05 PM, 26 Apr 2018

@save our currency : You're right about a person earning 20K and pays no tax but then pays GST on his or her 15K expenditure on goods and services. Which, as I have responded to @fairplayer (below) is a problem of the framing and implementation of the GST by a very desperate and idiotic Najib.

Yap Chun Kiat11:57 AM, 26 Apr 2018

@fairplayer: The problem is the way GST was implemented and the timing of its implementation was curious. GST did not come with a lot of homework done. It was done hurriedly to put a floor under the then yawning budget deficit. And despite claims by Najib the deficit has narrowed, there are doubts given the profligacy of spending on the one hand and debt borrowing on the other. If, as you suggest, GST must be abolished and subsidies reinstated, the problem of high prices won't disappear. In other words, you won't get lower prices over the long run though you may for the short run. Remember that to reinstate subsidies - and subsidies haven't completely been removed; take petrol retail prices being 'stable' the last seven weeks, for instance - other taxes, levies, fees and charges will be raised to pay for the subsidies you want. Subsidies are no more free than lunches. Somebody, somewhere, will have to pay for subsidies at some point in time. Pakatan Harapan knows this, and its promise to abolish GST is crudely populist and insane. It will be forced to change its mind if and when it's in power and looks at national accounts first hand to realise the problems the Najib and previous regimes, including Mahathir's, have created for Malaysia over the decades.

Yap Chun Kiat11:54 AM, 26 Apr 2018

Mr Lau SST is so differ from GST. It will lead to price of goods falling. GST if you a trader need to pay GST upfront even you can’t sell your goods in 6 months. It eat up to your cash flow. This will indirectly cause the price of goods increased as trader need to cover the interest factor too. The sentiment of consumer really low now.

kevin gooi11:50 AM, 26 Apr 2018

The abolition of GST will reduce price of goods EVENTUALLY and more importantly it will not keep spoon feeding Mr and Mrs PM for their benefits. If GST is managed as well as Singapore and Australia where it benefits and takes care of the rakyat... the rakyat may be able to accept... so please don't stand with BN and tell us merge rakyat that GST has no impact cause GST DOES HAVE A HUGE impact!

Daniel Abishegam11:46 AM, 26 Apr 2018

We need to have laws that protect consumers from illegal profiteering and monopoly from businesses. We should revive the Consumers' Association as a watchdog and to serve the consumers. For example, coffee shop food rise almost 20% every year. Is that ethical, even with the 6% GST?

David Wong11:01 AM, 26 Apr 2018

One of the reason why ringgit depreciating and affect price good go up, because of foreign investor leave Malaysia or di not want to come to Malaysia because they see Malaysian has less purchase power. Invesrt in other countries better. And why Malaysian has less purchase power? It is because of GST intro and remove of subsidy!

Abdul Satar Zakaria10:30 AM, 26 Apr 2018

GST must go! Subsidies must be reinstated, if we care about the struggling rakyat. Dr M had the guts and the vision when he declared 1999 the tax-free year! There was no GST then! All subsidies were intact as well! So, can Harapan do the same for the people again once PH comes into Federal power? Sure can

lee choon kheng10:16 AM, 26 Apr 2018

The real reason for the hike in the cost of goods is actually the depreciation of thte Rinngit which fell by almost 50% at one stage against the USD and is today still 30% less than its previous value. The result was in Ringgit terms this pushed the prices of imported goods up by between 30%-50% resulting in sticker shock for many people including me. The solution is to strengthen the Ringgit by controlling our debt and our debt servicing which has exploded to RM800 plus billion and RM31 billion respectively . We should maintain the GST, while cutting down on leakages. For example it cost the government RM18 million to built a school while the Chinese schools which are privately funded by the community are doing it for between RM9-10 million. so what happened to the RM8 million difference ?

Lim Seng Heng10:13 AM, 26 Apr 2018

We will be first to change our phones when 6% GST is no more.

Ong Thean Haw10:08 AM, 26 Apr 2018

For example someone earning 20k a year having no relief from income tax payys no tax. But will pay rm900 in gst if spends 15k out of 20k on GST fiable goods and services. To pay rm900 for income tax will put that person in the 30k taxable bracket. The GST collected should then be more than personal income tax. But out of 120 billion income tax, say one third comes from personal income tax then GST collected should be more than 43 billion. Is there a leakage? Please correct me.

chai yinfun09:57 AM, 26 Apr 2018

Before GST many goods were having sales tax exemptions. But with gst there is additional cost of 6 % to all products and depending on the number of distributors to end user in the distribution chain it would end up about 12 to 24 percent taxes. What about other goods. Than the cost of employing an accounts officer or outsourced to accountant to do GST accounts is few thousands as the GST law is barbaraian . Than since we are end users to products we have to buy for personal use there is gst. So we have to mark up 30 percent as petrol and other subsidies removed to compensate . Better remove Gst. I feel sad for big families especially end December when families go shopping for school bags , shoes etc the GST they have to pay. No use Br1m as the GST takes up more than it. An average family will end up paying Rm3k in Gst a year so what the right hand give as BR1M the left hand takes more than double in form of GST. Without Gst there was lower cost of living and government gave so much subsidies. Now with so much corruption in ppen scale the gst will be increased .

shewyean lee09:54 AM, 26 Apr 2018

It is just common sense that reduce GST will rejuvenate the many dying industries of various sectors with additional 4 billions per annum that currently go to government coffer, now back to the economy rotating among different industries. With price reduced or same price doesn’t really matter, let the demand and supply fix the price tag. But additional billion of ringgit rotating in the business will surely help every industries.

Abdul Satar Zakaria09:52 AM, 26 Apr 2018

GST might not reduce prices, but people has more money to spend if it is abolished. For example, the same cloth traders that has to pay 6% government GST tax but do not charge higher price to consumer, now has 6% more to spend, if GST abolished. This will apply to all industries, and the market will be moving again.

Abdul Satar Zakaria09:42 AM, 26 Apr 2018

GST is for high income countries, like Australia, Singapore, where most people earn enough to pay taxes. In Malaysia, a young degree-holder worker earns less than 3k. Yiu expect them to cough up with extra 6%? How about those poorer folks? They have to pay 6% for a plate of rice they eat.

Racheal Goh09:42 AM, 26 Apr 2018

If middle class income people are badly hit, the business that sell products/services to the mass will be greatly impacted. This people will still go for compulsory consumption products like food industry, but will cut down optional products / services like facial treatment, car saloon, gym expenditure and etc. Even on compulsory consumption food industry, this people will reduce fine dining and restaurants. In other words, many industries are impacted, people has less money to spend.

Abdul Satar Zakaria09:40 AM, 26 Apr 2018

Even parent nursing home also subject to GST. Shit.

ANG CHIN TEK09:38 AM, 26 Apr 2018

GST killed the middle class income people. High income class people can afford GST. Low income class people doesn’t spend much, and they are compensated with higher BRIM and occasional subsidy somewhere. Middle income class people are the one that greatly hit, they spend and they are not eligible for any initiative from government that go back to the people.

Abdul Satar Zakaria09:32 AM, 26 Apr 2018