Service Tax increased, no good

In the Budget 2011, the Government proposes that the service tax be increased from 5% to 6%. Definitely an unfavourable move by government.

With the increase, rakyat have to pay more to watch Astro because it will be imposed on paid TV broadcasting services too.

“At a time when the Government is introducing measures to help the rakyat, these moves are not positive,” said AmResearch Sdn Bhd senior economist Manokaran Mottain.

“We’re not sure how much the Government will receive in revenue from these moves. Although we do not view this positively, the impact on the rakyat is expected to be minimal,” he said.

Anyway this move will definitely help Government to reduce its fiscal deficit but not rakyat pocket.


In fact, the Government should reduce personal tax to counter the above increase. To bad it does not materialise.

I guess this increase could be the transition to GST soon.