There you have it, the Finance Minister Lim Guan Eng has finally announced the SST implementation to take effect from September 1, imposing 10% for goods and 6% for services. The IT industry is worth billions and contributes substantially to the economy and the GDP, reverting back to the older tax system should be business as usual for most but with the new Minister bent on correcting the system which was deemed flawed will the new tax system impact IT goods more than how GST did?

Before we look into how SST will take effect, lets dial a couple of years back when GST was introduced at a time when the IT industry had just gone through one of the worst sales cycle with slow uptakes and poor consumer demand. It is commonly known the retailers operate on razer thin margins, when GST came about many were stuck between a rock and hard place, leaving them to absorb the 6% to keep  the price to encourage sales. Speak to any retailer in Low Yat or Digital Mall and they will lecture you on how tough things have become since the GST implementation when a time when PC sales were dipping and consumer demand at lowest ebb.

Now with SST back, the price of goods manufactured or imported will have 10% added to its price tag this is presumably more than the 6% imposed with GST, technically this will make the goods more expensive than before. PC.com checked with major tech manufacturers on their pricing plans post September 1 with many having no indication of price increase while the likes of Dell said they yet to receive directive from their regional office. Meanwhile OKI Data Malaysia, Country Manager Goh Yin Hwang says he will be discussing the matter with the dealers on the latest update.

By the looks of things its imminent that the goods are all going to see a price increase but on the bright side unlike GST where every item is charged, SST will have a list of taxable goods which will vary based on consumer needs. According to a statement released by the Ministry, the calculation of tax is charged when product rolls out of the plant while GST is after mark up along the value chain before a customer purchase. For example a RM1 bottle water is taxed 10% when manufactured making it RM1.10 while GST is 6% at retail when 7- Eleven is selling it at RM2 costing the bottle RM2.12.

We can expect some items on the list with prices going up but there could be items that not be taxed at all, like notebooks and smartphones which many wishful Malaysian would want.