Distributive effects of the introduction of GST in Malaysia

In the Budget 2005, the Malaysian government made a commitment to introduce a comprehensive goods and service tax (GST) on 1 January 2007; however, that date has been postponed. When it is introduced, the GST will replace the sales tax and service tax, which were introduced in 1972 and 1975, respectively. In this article, the authors make an estimate of the impact of the introduction of GST on retail prices.