Malaysians clueless about GST, survey shows

BY ZURAIRI ARDECEMBER 18, 2013

Customers leave with their groceries after shopping at a supermarket in
Kuala Lumpur August 28, 2013. — Reuters pic

KUALA LUMPUR, Dec 18 — Putrajaya is likely to face an uphill task when it rolls out the Goods and Services Tax (GST) come April 2015, with more than half of Malaysians in a survey admitting that they are clueless about the consumption tax.

In a just-released public opinion survey carried out this month by independent pollster Merdeka Center, 55 per cent of the 1,005 respondents said that they did not understand how the GST worked.

Out of the total, 20 per cent of Malaysians said they know nothing about the GST, while 35 per cent said they do not know very much.

On the other hand, 44 per cent of respondents said they understand the consumption tax, with 11 per cent knowing “a great deal” about it.

The result of the polls appear to back the arguments by politicians from the opposition Pakatan Rakyat (PR) bloc, who have been urging the government to defer introducing GST, claiming consumers, especially those from low-income households, were not ready for it.

The PKR-DAP-PAS partnership is planning to mount an anti-GST protest this Friday, called “Faham GST, Tolak GST (Understand GST, Reject GST)”, its de facto chief Datuk Seri Anwar Ibrahim said.

While tabling Budget 2014 last month, Prime Minister Datuk Seri Najib Razak announced that Malaysia will finally implement the long-delayed GST at 6 per cent beginning April 2015 to tackle its chronic deficit.

To offset the new tax, Najib also announced that personal income tax will be reduced by 1 to 3 percentage points, depending on the income bracket.

A one-off payment of RM300 under the 1 Malaysia People’s Aid (BR1M) will also be made following the implementation scheduled for April 1, 2015.

The GST is a consumption tax, meaning all Malaysians will be taxed according to their level of spending, regardless of income. 

This differs from income tax that is only applicable after a certain salary level is exceeded.

Malaysia’s proposed GST rate of 6 per cent is the lowest in the region, whereas most countries implement a 10 per cent value added tax (VAT).

The tax was first announced during Budget 2005 and was originally scheduled to be implemented in 2007 before it was deferred.

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