KUALA LUMPUR: The increase in the Service Tax from six to eight per cent from tomorrow has sparked a rush among consumers to make payments for major services.
From purchasing new vehicles to ensuring existing ones are in top condition, consumers are navigating the tax increase with financial prudence.
Aware of the potential financial strain ahead, consumers are seizing lower prices to avoid the inevitable uptick in costs.
Social media executive Maria Subri, 25, said she had planned to buy a car after Hari Raya Aidilfitri, but was forced to expedite her purchase after learning about the increase in February.
"After learning about the looming tax hike, I immediately submitted documents to buy a small car for work.
"It wasn't an impulsive decision. I need a car as I've been using my mum's one for work."
She said she hastened her purchase after calculating how much the car would cost after March 1.
"Buying earlier means I would save more than RM3,000.
"As my salary is not high, I believe this decision will benefit me. If car prices increase, my monthly instalment will also increase. By buying now, I will only need to bear the higher cost for servicing."
Property agent Frederick Lim, 27, said he saved RM20 by servicing his car before March 1.
He said there was a queue at the service centre, with 111 other bookings slotted for that day.
"I think they are aware about the tax hike as well."
Some business owners said they would maintain their prices to retain their customers after the tax increase.
Hardware shop owner Jasminder Singh, 57, said he was aware his profit margin would shrink.
"I cannot increase prices as I don't want to lose customers. They have been complaining to me about the rising cost of living.
"So I took that as a hint that I cannot increase prices or I will lose them."
Malaysia Retail Chain Association deputy secretary-general Dr Afendi Dahlan said the association recorded a spike in sales in some retail and restaurant segments ahead of the tax hike.
"However, we cannot attribute it to the increase in the tax. There are other factors to consider, like festivities shopping and the rise in the consumer trend of opting for local brands due to tensions in the Middle East."
He believed the tax hike would indirectly increase the cost of doing business for retailers.
"It is too early to assess the overall impact. Usually, any cost increment will ultimately be borne by consumers."
National Consumer Foundation president Datuk Mohd Firdaus Abdullah believed middle-income earners would be among the most affected.
He said the tax rise coincided with the ringgit's depreciation.
He said middle-income earners would likely need to fork out an extra RM100 a month due to the tax increase.