IT’S only been two weeks since the goods and services tax (GST) was zero-rated, and the smiles are returning to traders and shoppers for this year’s Hari Raya Aidilfitri celebrations.

Clothing and food merchants are already seeing a small uptick in sales as crowds mobbing the popular Raya bazaars in Kuala Lumpur and Shah Alam seem bigger.

They also expect to see a small increase in their profits as they no longer have to absorb the extra 6% charged by their suppliers and importers.

“We had to absorb the tax that was charged to us by our supplier. It meant less profits for us because we couldn’t raise prices,” said tailor Iwan of Sahjaya Sani Entreprise.

“Now, we’ll be making back that profit,” said the 31-year old whose store is located at Jalan Masjid India in Kuala Lumpur.

Although most shoppers met by The Malaysian Insight say they aren’t spending more this year, many say they have more money in their pockets this month.

“I’ve saved a lot on the daily expenses for my wife and six kids, on food and toiletries ever since I didn’t have to pay for GST,” said businessman Azman Anas, 50, of Kelana Jaya. 

“So with the extra I save, I can top up on expenses for Hari Raya. (Zero-rating GST) made a big difference for me,” Azman told The Malaysian Insight at Jalan Plumbum in Seksyen 7, Shah Alam, which is known for its modern Malay-Muslim fashion stores.    

Lightening a burden 

“My sales dropped by half in 2015 compared to 2014,” said Aishah Sutab, 23, who sells headscarves in a lane off the famous Jalan Tunku Abdul Rahman.

Several traders said they expect to see between a 10% and 20% increase in sales this year.

Fariz Aiman Hidayat Kamaruddin said his store and others on Jalan Plumbum, Shah Alam, would extend their opening hours till 1 or 2am this year due to the deluge of customers. 

“Last year, this area would already have been deserted by 11pm. Now there are even shoppers at 3am,” said the sales manager who expects his store to see a 20% rise in business. 

Jalan Masjid India songkok seller Muhammad Yaakob Syed Mubarak said his sales picked up by about 10% after June 1.  

“I used to get charged GST by my suppliers and I had to absorb the cost. But no more. Shoppers also feel they have a little bit more money to spend. So my business will improve this year.”

Not out of the woods yet

The unpopular tax was brought down from 6% to zero on June 1 by the new Pakatan Harapan government. The administration plans to re-introduce the Sales and Services Tax (SST) in September which will only be levied on manufacturers and importers.

Eliah Jaya, who runs a tailoring shop in Shah Alam, said her business is doing worse this year compared with the last, even without GST.

“I think people are still very cautious about what they spend on. There’s a lot of window shopping but little commitment to buy,” she said, adding that sales have dropped by about 10% compared with last year.

“I feel like diapers are now cheaper. I can really see the difference,” said Ammar Syahmi, a civil servant, who was waiting for his wife outside a Muslim fashion store in Shah Alam.  

Another shopper Asri Mektar, 37, said while he did not spend more on this year’s Hari Raya celebrations, the financial burden has now been eased.

“With the GST gone, I feel far less burdened when I have to fork out cash. In the past, I would look at the tax and think about all the extra things I can buy. Now it’s easier to afford those things,” said Asri. – June 14, 2018.