Today is the one year anniversary of the introduction of the Goods and Services Tax (GST) in Malaysia. On April 1st 2015, GST was levied to replace the sales tax and service tax (SST). A 6% GST would be charged and collected on all taxable goods and services produced in the Malaysia and imports from that day forward.
It is claimed that introduction of GST in 2015 raised RM27 billion in collections that year. For 2016, GST collection is projected at RM39 billion. However, with consumers being made to bear the brunt of this tax, many families across Malaysia have found the resulting price increases challenging burden.
In order to relieve this burden and to mark the first anniversary of GST the EZTakaful blog has compiled a few helpful facts and top tips on how you can save a few ringgit and sen.
Are all goods and services subject to GST?
GST is imposed on all goods and services produced in the country including imports. However, certain basic foodstuff likes rice, sugar, flour, cooking oil, vegetable, fish and meat, eggs and essential services such as health and private education, public transportation, residential property and agricultural land are not subject to GST.
How can you save in the post GST era?
Shop from individuals or small shops to save and support local entrepreneurs
As only businesses with annual sales turnover of RM500,000 and above are liable to register under GST, so you will not be charged GST if you purchase from individuals or small shops that do not reach the threshold.
Shop direct with wholesalers
As GST is levied on most transactions in the production process with a compound effect, you may enjoy some savings if you can minimize the number of parties involved in the process, like shopping directly from the wholesalers.
Shop for non-exempted items in neighbouring countries or in tax free places during your holiday
Although Singapore charges their citizens GST and Thailand has their VAT, as a tourist you are exempted from this – you can claim a refund at the airport when you depart the country. Therefore it may be worth doing some shopping on your next overseas trip to save some cash.
Cook your own meals at home
Though most food is GST free, the restaurant cooking for you is offering you a service, so you will be charged GST. Why not consider eating at home more often, where food tends to be healthier in the company of your loved ones after a long day’s work?
Turn to ‘do-it-yourself’
If you need a new wardrobe, can you source for the raw materials and make it yourself? Designing and making your own clothing can be a lot of fun! If you want to eat premium bread, could you make your own instead of shopping at the bakery? Get your spouse and children involved, a family cooking session is more fun that you could imagine!
Repair instead of replace
Instead of throwing away your technology when it is broken, consider repairing it. Not only will this be kind to your pocket, it will be kind to the environment too!
Last but not least, protect yourself with EZTakaful
With GST, prices of private healthcare services and certain medications have risen. While healthcare is “GST-exempt”, many items and services that are part of the process such as private doctors working in private hospitals are not.
Our Takaful products come with Hospital Emergency Cash, Nursing Care Allowance, Major Surgery Cash and Outpatient Emergency Cash and can help you beat the ever-rising cost of quality of medical care for you and your loved ones.