PETALING JAYA (THE STAR/ASIA NEWS NETWORK) – Retailers in Malaysia are bracing for a surge in sales, with foreigners and locals alike joining in the buying frenzy as the three-month tax holiday period comes to a close at the end of this month.
Malaysia’s unpopular 6 per cent Goods and Services Tax (GST) was zero rated by the new Mahathir Mohamad administration on June 1.
It was fully scrapped after the government repealed the Goods and Services Tax Act in Parliament this month. It will be replaced with the Sales and Service Tax (SST) that will be implemented in September.
A retail consulting body said it expected Singaporeans to also take advantage of the remaining days of the tax break, with one major shopping mall saying it was preparing for a “golden period”.
And, like the icing on the cake for shoppers, most malls are also offering further discounts and promotions this Merdeka month.
Retail Group Malaysia managing director Tan Hai Hsin said a “shopping spree” was expected as National Day approached.
“We also expect Singaporeans to come in and enjoy the savings,” he said.
He said the expected retail sales growth rate for the third quarter of the year, which included the last two months of the tax break, had been revised upwards from 5.2 per cent to 6.8 per cent.
He said demand for food and beverage remained consistent throughout.
“After the Goods and Services Tax was implemented in 2015, the restaurant business was not affected as badly as the others.
“So when the tax holiday started, the food business did not increase tremendously,” he said.
Retail Group Malaysia is a retail consulting firm which provides research and consultancy services to retailers and shopping centre developers in Malaysia.
Malaysian Retail Chain Association president Garry Chua said a buying spree was expected before the SST kicks in on Sept 1.
“There could be a last-minute rush by consumers trying to take advantage of the tax break,” he said.
He said since the tax holiday began on June 1, overall retail sales in malls had recorded double digit growth of up to 20 per cent on the average.
High-value items such as cars and electronic items enjoyed a boost in sales of about 30 per cent on average, Datuk Seri Chua said.
Mydin managing director Ameer Ali Mydin said he even expected “panic buying” towards the close of August.
“We forecast that our sales will go up by 5 per cent to 7 per cent for August. In the first two months of the tax break, we did better by about 3 per cent,” he said.
Malaysia Automotive Association (MAA) president Aishah Ahmad said the car industry saw total industry volume (TIV) increase by 6 per cent, to 68,465 units in July.
She said this was the second highest monthly TIV achieved in the history of the local automotive industry.
“We expect car sales figures in August to be maintained at the same level as in July,” she said.
1 Utama Shopping Centre general manager Patrick So said a combination of factors would contribute to an increase in retail sales.
“We expect a ‘golden season’ for retailers towards the end of August with the tax break coming to a close,” he said, adding that retailers were also offering various discounts and promotions during this period.
On the consumer front, those looking for high-value items are going all out to take advantage of the GST-free period.
Ms Aimee Yeoh, 30, said she felt it was more “worth it” to shop for high-value electronic goods and branded beauty products.
“I’m not sure if the items I want to buy would be SST-exempt, as there’s a lot of uncertainty over what is defined as ‘luxury goods’.
“So I’d rather buy them now. I’m making a list of what to buy,” she added.
Software engineer George Pang said he would be buying a pair of high-end headphones usually priced at about RM2,400 (S$800).
“I’ve been thinking whether or not to get these headphones for some time now but could not make up my mind.
“Seeing that the end of the tax holiday will soon be over, there is a possibility that the headphones would be pricier than at present,” added the 23-year-old.
Ms Bue Lim-Teh, 24, said she went around looking for an electronic piano.
“I’ve found a few interesting models costing about RM2,000, so I hope I would be saving about 10 per cent of that,” said the teacher.