KUALA LUMPUR: Prime Minister Datuk Seri Najib Tun Razak on Wednesday
shopped for some essential items at the Kota Damansara Giant hypermarket
as he observed the implementation of the Goods and Services Tax (GST)
and its impact on consumer goods.
"I noticed that the prices of goods here are reasonable and the
essential goods are zero-rated as set by the government," he wrote in a
post on his Facebook account.
Najib arrived at the hypermarket at 4.50 pm, picked up a shopping
basket and took several products from the shelves, such as toothpaste
and Milo.
He uploaded five photographs onto the Facebook account, among them of
him buying products, showing a receipt and posing for photographs and
exchanging greetings with shoppers.
The GST came into force today, and is seen as an important element in
strengthening the national economy by taking into account the interests
of the people.
With the implementation of the GST, Malaysia joins more than 160
countries which have already introduced this form of taxation, among
them seven countries in Southeast Asia which are members of ASEAN.
The Government targets to collect revenue from the GST, rated at six
percent - the lowest among the ASEAN countries - for development and
upgrading of social infrastructure. - Bernama
Citing the Association of Banks in Malaysia,
CIMB said in a report that any added costs incurred post-GST would be
“mostly pass-through” and have a minimal impact on banks’ earnings.
“The direct negative impact of the implementation of the GST is the RM10mil to RM20mil additional cost of managing it.
“We also gathered that the banks are working
with the regulators on the arrangements to claim from the Government
the additional 6% GST they had paid to their vendors,” the research
house said.
CIMB expects the imposition of the GST to
dent consumer/business sentiment in 2015, at least within six months
after the implementation, namely, between the second and third quarters
of 2015.
“This does not bode well for banks’ loan and
fee income growth. There have already been signs of weakening loan
growth, which eased from 9.3% year-on-year in December 2014 to 8.6% in
January 2015.
“We advise investors to continue trimming
their holdings in the banking sector, given the concerns of weaker loan
growth, margin contraction and higher credit costs,” said CIMB.
According to CIMB, among the items that would be “pass-through” costs are essentially fees and charges recovered from customers.
“This means that the bank is merely paying
for services on behalf of the customer. The underlying transaction
remains taxable (where applicable), but the tax invoice will be issued
to the customer by the service provider directly (if the tax invoice had
not been issued earlier to the bank).
“The bank will not charge an additional GST
but will deduct the GST amount from the customer’s account to pay the
service provider.”
