Sales up 20% during tax holiday

Businesses recorded an increase in shoppers and spending

PETALING JAYA: Since the GST rate was set to zero at the start of this month, businesses have reported an increase in sales as consumers take advantage of the tax holiday.

MalaysiaSingapore Coffeeshop Proprietors’ General Association president Ho Su Mong said its 20,000odd members in Malaysia recorded between 10% and 20% increase in patronage.

“There is a psychological effect to it; more people are coming in with higher expenditure power,” he said, adding that it would take time for goods and services to be adjusted to its correct market price.

He said in the long term, the general costs of goods would decrease by more than 6% as the Goods and Services Tax had affected different stages of the supply chain.

At the Council of Eminent Persons’ meeting with entrepreneurs yesterday, former Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said she hoped that Malaysians would continue to benefit from the zerorated GST.

“More people have been saying that there is greater vibrancy (in economy) now and people are starting to spend money.

“We hope the retailers will pass on the benefit to the consumers,” she told reporters.

Malaysian Automotive Association president Datuk Aishah Ahmad said car industry players were enjoying brisk sales too.

“Most car companies received a lot of bookings and delivery requests before the implementation of the SST (Sales and Service Tax).

“Car distributors are trying their best to fulfil orders received, provided stocks are available and loans are approved by the banks,” she said.

But the zerorated GST has a relatively smaller effect on other industries.

Sundry Goods Merchants Association president Hong Chee Meng said that members who sold sundry goods and daily necessities had relatively stable sales with or without GST.

“In our industry, our sales won’t be like a ‘yoyo’. Consumers will still need these daily necessities and businesses don’t make a huge profit margin from groceries.

“It’s not like in the car or property industry where you see a sudden surge or drop in sales,” he said.

On the consumers’ side, however, Malaysian Muslim Consumers’ Association lead activist Datuk Nadzim Johan said enforcement was key to ensuring consumers would not be exploited.

“It is the norm for businesses to hike prices but not to reduce them,” he said.