Abstract:

The implementation of Goods and Services Tax (GST) has contributed to the changes in price of consumer goods and services due to the rising cost of production and supplies. This situation may have consequently reduced total demand for consumer products due to decrease purchasing power and change in consumer spending behavior. This study was conducted to investigate the level of understanding of GST and to examine the relationship between the understanding of GST and spending behavior among consumers. Questionnaire-based survey was conducted among 500 Malaysian consumers and 300 valid responses were received at the end of the survey. The result shows that the level of understanding towards GST among consumers is at low level. There is a significant changes in spending behavior among consumers after the implementation of GST mainly due to an increased in price of goods and services.  No significant relationship between the level of understanding of GST and spending behavior among consumers is found. This study provides information on consumer feedback regarding GST implementation and under the spending behavioral changes among consumers in regards to GST.