KUALA LUMPUR – June 12, 2018: The Federation of Malaysian Consumers Associations (Fomca) said prices of some goods may actually increase when the Sales and Service Tax (SST) is re-introduced in September.
Fomca deputy president Mohd Yusof Abdul Rahman told The Mole today this is because SST’s tax rate for products could go up to 10 per cent if no changes are made to the previous SST system before it was replaced by the Goods and Service Tax (GST).
He said there may even be other factors than methods of taxation that can influence price changes.
“Cars for example, are cheaper with GST rather than SST. Theoretically, this will mean that certain goods, like cars, will revert to its more expensive prices when SST is reintroduced in September.
“Also, there will always be those that take advantage of the transition period. In this context, the re-implementation of SST could actually result in higher final price.
“While there may be other factors such as old stock, profit margin or cost of supply, average consumers won’t really know what really cause the increase in prices,” said Yusof.
Yusof advised consumers to be more sensitive to changes in price and report any abnormal price increases to the Ministry of Domestic Trade, Cooperatives and Consumerism (KPDNKK).
“If prices do go up after the SST reimplementation, an average consumer might not know if the price hike was due to traders taking advantage or other factors.
“The best is to just report such cases to KPDNKK and let them investigate whether the price increase was justifiable or not,” he said.
“GST or SST, there shouldn’t be too much difference in the final price of goods,” he added
Prime Minister Tun Dr Mahathir Mohamad has confirmed that SST will be reintroduced on Sept 1.
Finance Minister Lim Guan Eng had also said that SST will be implemented at the former rate of 10 per cent.
Malaysia has been without consumption tax since the zero-rating of GST on June 1 and the reintroduction of SST is expected to make up for the shortfall in government revenue.