(Source: Malaysia's Ministry of Finance) Hanoi (VNA) - Japanese companies have warmly applauded Malaysia's move to abolish an unpopular goods and services tax (GST) as a step to spur consumer demand in the Southeast Asian country.
Malaysia’s Ministry of Finance announced on May 16 that Malaysia will cut the GST rate from the current 6 percent to zero on June 1.
All registered businesses in Malaysia “need to comply with the zero rate", the ministry said in a statement.
Panasonic Malaysia Sdn. Bhd., a sales subsidiary of Japan's major electronics company Panasonic Corp., is reacting positively to the announcement.
Mazlee Mokhtar, senior executive of the firm, said the GST abolition and other market stimulus measures by the new government will create positive sentiments in consumer demand in Malaysia in the future.
He said Malaysian consumers expect prices to drop after the GST is abolished, but he also indicated that price fluctuations of goods are caused not only by the tax rate but also other factors such as the foreign exchange rate.
Meanwhile, Edaran Tan Chong Motor Sdn. Bhd., the sole distributor and assembler of Nissan Motor Co. vehicles in Malaysia, is considering a refund if prices of a wide range of goods decline after the GST is officially scrapped.
The Ministry of Finance's announcement came a week after an alliance of opposition parties, led by former Prime Minister Mahathir Mohamad, was victorious in the nation's general election, subsequently restoring him to the premiership.
Mahathir had pledged during the election campaign to eliminate the tax introduced in 2015 by then Prime Minister Najib Abdul Razak.
In January 2018, Najib said GST contributed over 44 billion ringgit (about 10.5 billion USD) to the country’s budget in 2017.-VNA
VNA
