If you’ re going“WTF” about GST, the experts layout how it affects your budget.
We break down the What in WTF on GST and how it affects you
When GST came in, many remember t he sharp rise in costs. We felt it. As a result of Malaysia’s 14th General Election , t he new government has worked to fulfill their zero-rated GST promise. As at 1 June, GST was zero - rated.
With this , came some confusion. Here, Andy Gan, an associate member of Chartered Institute of Management Accountant ( CIMA) and Chartered Global Management Accountants ( CGMA) who also founded an IGCSE Centre, Twins Education, and Ian Wong, a licensed financial planner, explain how this affects your coin and everyday spending.
WHY SO HIGH?
Pr e-G ST, not everything was subject to service tax. But when GST came in, t here was a sudden spike in prices. According to Ian Wong, there were two main reasons to explain what happened: “Goods that previously did not in cur a Service Tax suddenly had to charge GST. Goods t hat were previously factoring in the Sales Tax of 10%, maintained the same price even after the removal of the Sales Tax. Then, these businesses slapped on the 6% GST. In this situation, the 6% GS Tis actually a lower tax, and should have actually resulted in a reduction in prices .” Who would’ve thought that, with the soaring prices we saw instead, right?
JUST WAIT FOR IT...
Zero - rated GST doesn’t mean that things will be cheaper forever. We’ re not charged t he additional t ax on our purchase, until Sales and Services Tax( SST) kick sin on 1 September 2018. And before you think that GST/ tax anything is t he one solely affecting prices, there are other things as well . Andy Gan says , “Consider other f actors , like the weakening of the ring git, increasing household debts and t he national debt.” So actually, it matter show well the country is doing as a whole.
GST vs SST
In the eye sofa shop a holic,Andy Gan believes that SS Tis a better choice for the short term. However, he adds: “Whether prices will really decrease is debatable as it will be determined by market force sat the end of the day .” Which supports Ian’ s point ,“Once the SST is in place, some costs will rise again. How much it rises will depend on the rate of the SST, which has not been set yet.”
While this is fine and dandy, just remember that there are ways to save some money in times when the urge to Add To Cart is just too unbearable.
More money to you!