CONSUMERS and small-business owners are finding that the cost of goods has not dropped by much since the replacement of the goods and services tax (GST) with the sales and services tax (SST).

In fact, for some, the end of the three-month tax holiday after the abolishment of GST in June was a bitter pill to swallow.

“Life was only better during the GST and SST transition period. I felt happy in that period,” said Julia Roberts, 53, from Petra Jaya in Sarawak.

“Then comes the SST. Wham! I felt I had been cheated by the government.”

But Julia appears to be one of few consumers who feel cheated over the implementation of the SST.

The SST came into effect on September 1, and while some like Julia bemoan the return of taxable consumables, most people have welcomed the drop in prices of most goods, even if only marginally.

For some, even the slight reduction in their monthly bills is a huge relief.

“SST only applies to select items, unlike GST, so of course, our monthly spending has dropped,” said Nasib Thien Wei Ren, 31, from Putatan in Sabah.

“(It’s) probably around 20% on our monthly groceries,” said the full-time Grab driver who earns around RM2,500 a month.

A woman who identified herself as just Lim from George Town, Penang, said the switch from GST to SST had cut the prices for some goods but has not made much impact on her family’s spending power.

“Some things like raw foodstuff are a little cheaper than before. But not everything,” she said.

“We have not been spending more (even with the savings). The economy isn’t that good and will take time to recover,” said the 60-year-old.

Cautious consumers

Several sundry shop owners from Puchong, in the Klang Valley, said replacing the GST with the SST has not improved spending power, as most people have become more careful.

“Since the price hike following the GST, we can see that buying power has dramatically decreased,” said Alice Choy from Choy Foong Enterprises, a local convenience store.

“Even though we haven’t implemented SST, we can see most people are still not spending like they used to.”

A sundry shop owner in Butterworth, said business at his store changed little even after the new government scrapped GST and replaced it with SST.

“The problem, I think, is not solely with the tax system. The issue is people are not having enough to spend these days.”

He also said his business cost has more or less remained the same.

“There’s no improvement. If I had to bear 6% GST before, I have to deal with 5% SST now. There is not much difference in how much I pay the suppliers.”

A dried foodstuff retailer, who only gave his name as Ooi, said the abolishment of the GST was a big relief as some of his goods were no longer taxed.

The businessman who specialises in importing dried foodstuff and some non-edible items from countries like Taiwan and China, said the SST system was also easier to implement compared with the GST.

“In the past, if I imported RM1,000 worth of joss sticks, RM60 went to GST. There was a time the Hong Kong exporter also increased the prices. My customers were very unhappy,” he said.

“We don’t have such problems with SST. Joss sticks and other items for religious use are all exempt from tax.”

Ooi admitted that the dip in sales could be due to many reasons and not entirely because of the tax system.

“These are separate issues. It can be due to many reasons why a business is not doing well. Maybe there is a marketing problem,” he said.

He said even though prices have not dropped drastically with the abolishment of the GST, many consumers and retailers are feeling relieved, even with SST.

“What I can tell you is – with GST gone, you don’t hear people scolding the government every day like they used to.” – October 22, 2018.