Govt to rake in extra RM6.6b from GST
PETALING JAYA: The implementation of the Goods and
Services Tax (GST) by the government is expected to
rake in additional revenue of RM6.6 billion for 2015
despite the significant expansion in the zero-rated
and exemption items, said HLIB Research.
"Reinforced by slower income growth, lower commodity
prices and tight loan conditions, we opine that
consumer spending will remain subdued in the second
quarter before recovering in the second half of
2015. We maintain our private consumption growth
forecast at 5.5% for 2015, the slowest expansion
since 2010," HLIB said in its report yesterday.
On inflation, it expects the consumer price index
(CPI) to spike up by 1 percentage point in April and
0.5 percentage point in May.
"We believe the expanded list of zero-rated and
exemption items will result in a lower-than-expected
GST impact."
It maintained its headline inflation forecast at
2.5% for 2015. On a monthly basis, it expects the
CPI growth to range between 3.0% and 3.5% in the
second half of 2015.
It added that the
overall impact on earnings is likely to be muted as
most companies have already implemented and passed
on the GST while impact on volume was expected to be
minimal and temporary. |
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"While sales of some
companies may experience quarterly fluctuations before
and after GST implementation, we expect full year impact
to be a better reflection of consumers taking time to
adjust for the changes as well as the already weak
consumer sentiment."
It said although some
sectors have difficulty in passing through the GST while
others decided to absorb to spur volume and market
share, the impact is also unlikely to be significant due
to the subdued consumer sentiment, companies focusing on
cost cutting as a counter measure, lower commodity, fuel
and electricity costs and the corporate tax cut in 2015.
Contrary to earlier fears about GST, HLIB said the FBM
KLCI has appreciated 11.5% from recent lows to breakout
from the previous downtrend line (1,816) and 200-day
simple moving average (now 1,819). It added that
momentum could carry it to test the next resistance of
1,878 and an all-time-high of 1,896.
"Despite
potential of overshoot on the upside, we are maintaining
our year-end target of 1,880."
HLIB said the potential risks include the Fed rate hike,
recent weak purchasing managers' index, 1Malaysia
Development Bhd, oil prices, the traditional volatile
month of May and a potential Fitch rating downgrade.
It is still advocating defensive and value proposition
with focus on sector upturn or 11 MP, resilient/visible
earnings growth, high yield and defendable earnings, US
dollar or raw material beneficiaries and battered
stocks.
Source:::
The Sun Daily , dated 28/04/2015......... |