PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - Businesses in Malaysia have begun putting up 6 per cent discount offers in response to the Government's decision to zero rate the goods and services tax from June 1.
This is aimed at boosting sales even before the hugely unpopular GST is done away with in about 10 days.
While some retailers slashed prices by offering 6 per cent discounts off all their products, others dished out discounts if a minimum purchase amount has been met.
Luxury and lifestyle retailer Valiram launched a sales campaign offering its customers 6 per cent discounts off items from brands such as Michael Kors, Bath & Body Works, Charles & Keith, Kate Spade New York and Tumi.
"From May 18-31, GST will stand for Great Savings Today as we offer our customers an early taste of a zero-rated GST shopping experience," the retailer said on Saturday (May 19).
Harvey Norman Malaysia is also offering 6 per cent discounts to customers at its outlets, while electronics and furniture retailer Courts Malaysia has also jumped on the bandwagon.
Another retail giant, Marks and Spencer, is offering 6 per cent discounts off minimum purchases of RM150 (S$51).
Habib Jewellers is also knocking 6 per cent off prices of jewellery till May 31.
Confectionery-maker Famous Amos Malaysia posted on Facebook that customers need not wait till June 1 to purchase items at GST zero rate.
Food and beverage establishment Steak and Lobsters is offering diners a 10 per cent discount off their total bills when dining in at the outlet in Desa Sri Hartamas until May 31.
Mydin is enjoying a boost in its sales even before the implementation of the zero-rated GST.
"Our initial fear was that sales would drop as people anticipate the zero-rated GST implemented on June 1," said the hypermarket chain's managing director Datuk Dr Ameer Ali Mydin.
"However, sales have picked up because consumers are in a jubilant mood, and have more confidence," he said.
Malaysian Retail Chain Association (MRCA) president Datuk Seri Garry Chua said he expected an overall reduction in prices.
"Consumers are happy and the sentiment is positive.
"This will drive back incremental sales for all retail sectors," he added.
Chua said manufacturers and importers would have to adjust their prices accordingly following the "tax holiday" before the sales and services tax (SST) is reintroduced.
Malaysia-Singapore Coffeeshop Proprietors' General Association president Ho Su Mong said with zero-rated GST, more coffeeshop owners would be moved to reduce the price of drinks and foodstuff.
He said Malaysians had suffered from the burden of the GST, with wages remaining stagnant.
"With the abolition of GST leading to reduced prices of goods, their spending power will increase. This is a good sign for all," he said.
Sundry Goods Merchants Association president Hong Chee Meng said the abolition of GST augured well for the industry.
He said consumers felt relieved, adding that he expected the 4,000-over members of the association to enjoy increased sales from now on.
However, he said there could be immediate challenges for sundry shop owners.
Some would have to absorb the cost of existing stocks that were already bought at prices inclusive of the GST, Hong said.
"Our profit margins are not high. The 6 per cent GST is a significant amount to us," he said.
Hong hoped that the Treasury would give businesses a grace period of about six to nine months to allow them to adjust their pricing.
"And, we hope that this would not be seen as cheating."