Singaporeans unlikely to be deterred by Malaysia's impending GST

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Malaysia is widely expected to announce a goods and services tax (GST) this Friday when the government unveils its 2014 Budget.

The impact of the GST on consumer prices is expected to be minimal because Malaysia already levies taxes on finished goods and services. The planned GST of 4 per cent will merely replace the sales tax at 5-10 per cent and the service tax at 6 per cent.

Economists said the GST is unlikely to deter Singapore shoppers, as it will not significantly increase consumer prices in Malaysia. According to the Express Bus Agencies Association, the relative strength of the Singapore dollar will help offset price increases resulting from the GST.

Economists said the GST is a more efficient tax collection system, because it is a tax on value added at all stages of production. Most economists expect the GST to be implemented in 2015.

Other changes expected at the upcoming Budget are property cooling measures. Economists said some of these measures could include higher property gains tax and additional buyers' stamp duty for foreigners.

These are likely to be of interest to Singaporeans, who make up three-quarters of home buyers in the Johor's Nusajaya area.