GST will start soon in less than 90 days effective 1-Apr-2015, here's 5 ways that I can think off to reduce the GST payment.
These five steps will be tough as GST is taxed on consumer expense, hence one should target reducing expense to pay less GST.
5
areas covered will surruound the physiological need (which is the most
basic need at the bottom of Maslow's Hierarchy of Human Needs).
Add up all the savings from these 5 strategies: 3600+9600+3000+100+1800 = 18100.
1. Food.
Cook
at home. By doing so, you will avoid paying GST on top of the likely
higher price to be charged at restaurant. Expect to save about RM 10 per
meal cooked at home (assuming RM15 cost to eat out and RM5 cost to cook
at home).
Do so consistently and maximum you can save RM300 per month or RM3600 per year.
2. Accommodation.
Stop
complaining about expensive house and buy one from secondary market. Do
your own survey for the price difference which can be at around 25% to
50% discount against new project for the same location. Additionally,
what you see is what you get in secondary market (NOT what is promised
in the future). Lastly, you can move in immediately after the transfer
of title.
Expected saving on monthly mortgage payment = RM800 per month or RM9600 per year
(Case
used = RM400k condo for secondary market with monthly installment of
RM1700; RM600k condo for new project with monthly installement of
RM2500).... 90% loan, 4.45% effective interest rate.
On GST
impact, the management fee will be GST taxed. As secondary market
management fee is usually cheaper than new project mgt fee, you save
double save (1st from lower mgt fee, 2nd from lower GST paid is smaller
as the 6% is applied on lower mgt fee).
Expected saving on
mgt fee = RM12 per month or RM144 per year (Assuming RM300 mgt fee for
secondary market and RM500 mgt fee for new market using the case of 1200
sqft condo).
3. Transport.
Take public transport if you can. There's a flat RM100 card which cover both LRT and Monorail for 30 days.
Expected saving on monthly mortgage payment = RM250 per month or RM3000 per year (Assuming RM100 flat myRapid card against RM350 petrol plus parking).
4. Apparels.
For
the coming CNY, reuse your dresses or clothes that you buy 3 years ago.
Most people won't remember what you wear 3 years ago anyway. However,
if you think this is necessary maybe set a budget e.g. maximum RM300.
Expected saving per year is up to RM100. Depending on how frequent you shop or buy clothes, this number can vary greatly. So I just put a small figure of RM100.
5. Smartphone.
This is not a part of Maslow's Hierarchy of Human Needs but I think it is applicable to the year 2015.
Use
XiaoMi instead of iPhone 6. This may sound extremely frugal to Apple
fans... but when I compare both phones... I couldn't justify how XiaoMi
mi3 cost about RM800 against iPhone 6 at RM2600 (more than 3 times
difference).
Of course this is assuming one only use the smart phone for basic function e.g. phone call, SMS, whatsapp and Facebook.
Expected saving per year is RM1800.
