The majority of businesses - 56 percent - surveyed by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) have reported a decrease in sales since the goods and services tax (GST) was implemented.

According to the ACCCIM report that was unveiled today, the profit margins of 60 percent of the businesses surveyed had also shrunk.

ACCCIM's Small and Medium Enterprises and Human Resource Development Committee chairperson Koong Lin Loong said a number of respondents with reduced profit margins last year reported that they had to absorb the GST as part of their business expenditures.

“When they absorb the cost of GST, their operating expenditure rises and their profit margins plunge,” Koong said in a press conference.

As for other businesses that did not absorb the GST, he said these respondents had no choice but to raise the prices of their goods and services to accommodate the additional taxation.

“As these businesses are charging higher prices (to accommodate GST), they will attract fewer customers, hence leading to shrinking profit margins,” Koong ( photo ) added.

Furthermore, over half the respondents, or 68 percent, reported that they still do not fully understand the workings of GST and how it affected their businesses, while another 10 percent were unclear about GST.

The survey also showed that most respondents still required assistance from their agents and accountants to understand GST better.

Released today, the survey is a detailed analysis of Malaysia’s economic situation for the second half of 2015.