PETALING JAYA: A survey conducted by Nielsen Malaysia has found that most consumers believe the zero-rating of the goods and services tax (GST) will lead to lower prices, with many expected to spend more on essential and non-essential items.
The survey, which involved more than 1,000 Malaysians of various ages across the country, found that four out of five consumers believed the zero-rating of the GST on June 1 would be good for the economy.
Some 57% of consumers expected prices to decrease while 33% believed they would remain unchanged.
Nielsen Malaysia managing director Raphael Pereda said the people appeared to welcome the zero-rating of the consumption tax, perhaps due to the increase in prices since its implementation on April 1, 2015, as reflected in the Consumer Price Index.
Pereda added that the optimism among consumers could mean “good news” for manufacturers and retailers, as data from the survey showed that 69% of respondents expected their spending habits to change following the reduction of GST.
Some 30% said they would spend more money on essential items such as apparel and clothing, perishable food, non-perishable food and baby products.
“Malaysians also showed a willingness to increase their spending on non-essential purchases such as holidays or leisure trips (33%), new property (27%) and out-of-home entertainment (26%),” he said.
Some 25% of consumers also said they would be able to channel their money towards paying off debts following the zero-rating of the GST.
“Many retailers have been providing consumers with discounts even before the zero-rated GST was officially implemented, to encourage consumers not to postpone their festive spending until after June 1.
“If these value-for-money promotions continue, we can expect to see an increase in sales volume compared to previous years,” Pereda said.
The survey also noted that the government’s plans to set a fixed price for fuel had been well received, with 77% of respondents viewing it as “good for consumers”, while nine out of 10 respondents believed that tolls would either be removed or reduced.
“It is clear that the recent policy announcements made by the government have gained the approval of a vast majority of Malaysians.”
The 6% GST is set to be replaced by the sales and services tax on Sept 1.