The Public's Perception of Goods and Services Tax

The Goods and Services Tax (GST) was introduced in Malaysia to stimulate economic development, escalate competitiveness in the worldwide marketplace, and generate a more stable source of revenue due to its resilience to economic fluctuations. It replaced the SST system that had several weaknesses, including high incidence of tax avoidance as well as extensive exemptions that brought down revenues and double taxation along the value-chain that pushed prices up. The GST at 6% rate was lower than the 16% SST rate; a reduction of 10%. Correspondingly, the price of products was expected to drop but that did not happen. In fact there were complaints from the public that prices actually went up. A questionnaire survey was conducted to investigate public's attitude towards GST, their knowledge on it, and whether they were satisfied with it. Most respondents were not in favour of GST. Many had a moderate knowledge on its attributes and were not satisfied with it. There was a significant difference in attitude amongst age and occupation categories. Knowledge and satisfaction levels significantly differed amongst age and occupation categories, respectively.