Some RM11bil may be put in the hands of Malaysians during the current three-month tax holiday period, following the 0% rate of the goods and services tax (GST). According to KPMG Tax Services advisor for indirect tax Datuk Tan Sim Kiat, consumers’ purchasing power is expected to improve after the GST is zero-rated, leading to a significant multiplier effect within the domestic economy.
“Based on the RM42bil GST revenue collected in 2017, Malaysians have paid about RM3.5bil on average for the consumption tax monthly. Now that the sales and services tax (SST) will only be introduced on Sept 1, we expect Malaysian consumers to have an extra RM3.5bil to spend per month from June to August. With no tax being paid on the goods and services in the three-month period, we are likely to see more spending power among the rakyat,” Tan told reporters after KPMG’s workshop on the transition from GST to SST regime.
He added that even with the introduction of SST in September, Malaysians’ purchasing power is unlikely to be affected significantly. However, it will be contingent upon the government’s mechanism to implement SST, which is yet to be announced.
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