KUALA LUMPUR, June 5 — The retail industry is projecting a boost in sales in the second quarter of the year after the abolishment of the Goods and Services Tax (GST), Malaysia Retailers Association (MRA) said today.

Its president James Loke said the zero-rating of GST on June 1 coincides with the festive season which is expected to rake in sales from 3.2 per cent in the first quarter to 5 per cent.

"On the first week, business was good because a lot of retailers were waiting for the prices of goods to go down after GST was zero-rated.

"Following this well reception, we foresee a boost in sales,” he told reporters at Ilham Tower today.

He said the association was summoned by the Council of Eminent Persons today to explain about the impact of GST and Sales and Services Tax (SST) on the retail industry.

Loke said the industry understands the government’s need to collect revenues but suggested that the SST to be introduced at a low rate of six per cent.

"There is still no fixed rate yet so we leave it up to the wisdom of the Council to come up with a good rate as the beginning.

"For us, less than six per cent should be good because if not, there will be a definite impact on the retail prices,” he said.

Among the topics discussed today included ways to overcome the oversupply of shopping malls and imposing taxes on online stores to keep the market competitive.

"Online businesses are a real threat to physical retailers because there is no taxation involved. Today we told the Council, they need to also be taxed to keep it fair,” he said.