Wednesday, 09 April 2014 00:26 K Vinotharan
Only 10% out of the 250 retailers under the Malaysian Retailers Chain Association (MRCA) are prepared to implement the upcoming Goods and Services Tax (GST) commencing April 1, 2015.
These retailers have engaged with tax consultants on the systems needed for the GST as well as counter measures on how to absorb an expected drop in sales while consumers digest the GST impact on prices.
The MRCA said based on a recent survey during its AGM, less than 10% of its members, mostly from the fashion industry, are prepared.
It said that in fact a majority of its members have yet to consider possibilities of the impact of the new tax that would replace the existing sales tax and sales and service tax.
“Retailers would take up to six months to prepare themselves towards the implementation of the GST. The MRCA is getting its members prepared through various seminars on GST,” said its outgoing president Datuk Nelson Kwok at a media briefing in Kuala Lumpur yesterday.
The reason why a majority of its members have not prepared themselves is due to the lack of awareness on GST and companies would rather wait till there is concrete proof that the GST will be implemented. Now that the Parliament had passed the bill for the GST implementation, these remaining companies will now move at a faster pace to prepare.
He said that the association is also conducting seminars not only on GST but to get its members to register themselves with the Customs in order for them to recover the cost imposed by their suppliers. He added that the MRCA will hold a seminar next week in Kuala Lumpur in which it expects 120 of its members to attend.
Kwok said the GST will certainly impact sales as consumers will be more thrifty in their spending. He said that some of the measures taken into consideration in facing a fall in sales post-GST would be to implement discounts for sales to help ease the burden of retailers.
Also present at the briefing was MRCA incoming executive secretary Shirley Tay who said MRCA have had past discussions with government officials on the impact of GST and the 6% rate is considered minimal, MRCA feels that retailers will not be able to see the full impact of the GST yet.
“We are currently seeking tax advice to see how we may best obtain any benefit from the soon to be implemented GST,” she said.
Commenting on the current situation of the retail industry in Malaysia, Kwok said that the industry is at a slow pace as retailers other than the food and beverage segment will only see a hike during festive seasons and school holidays.
“The industry is relatively slow after festive seasons and it would take up to three months for retailers to pick up the pace again,” he said.
MRCA’s incoming president Datuk Liaw Choon Liang, who is also the president of Focus Point Holdings Bhd, said the current focus of the association now is to provide more activities for its members in order to leverage on their brands and business models into franchise opportunities.
MRCA’s current members range from all sectors including fashion, food and beverage and services.