Prices up 30% since GST introduced – senator

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KUALA LUMPUR: The prices of many goods have inflated by 20 to 30 per cent since the implementation of the Goods and Services Tax (GST) on April 1.

Barisan Nasional (BN) Senator Datuk Chin Su Phin said if the prices did not come down in the next three months, the poor would suffer and this could potentially lead to social problems.

Chin, who is also Liberal Democratic Party (LDP) deputy president, said that during the debate on Supplementary Supply (2014) Bill 2015 at the Dewan Negara sitting here.

He urged the Ministry of Domestic Trade, Co-operatives and Consumerism (KPDNKK) to monitor the increase in prices in restaurants and check if the premises were registered with GST.

“People are wondering why the restaurants are increasing their prices when basic goods such as meat, chicken and so on are not subjected to GST.”

Chin pointed out that a plate of cockles previously sold at RM3 has been increased to RM7.50, whereas the price of fish head curry has soared more than 100 per cent from RM35 to RM80.

“I recall Deputy Finance Minister Datuk Ahmad Maslan who said in last May that only 10 per cent of the goods would become more expensive after the implementation of GST, while prices for 48 per cent of the goods would remain unchanged and 42 per cent would be cheaper.

“He (Ahmad) said again this January that the government expected nearly 54 per cent of the goods would become cheaper.

“None of these predictions came true.”

According to a survey conducted by the Federation of Malaysian Consumers Associations (Fomca), Chin said the prices of some goods were 20 to 30 per cent higher than the reference price of the government.

He said many vendors and hawkers have raised their prices by over six per cent due to higher costs.

“Previously, the government had thought that prices would drop by four per cent with the introduction of six per cent GST to replace the 10 per cent sales tax.

“But the reality is very different,” Chin said.

The fact is that many small and medium enterprises (SMEs) are unfamiliar with sales tax refund due to its complicated procedures, therefore they pass on the overhead costs to end users, he said.

He went on to say that the prices of electrical appliances were expected to fall, but the outcome turned out to be the opposite.

“Indeed, certain items such as cars have become cheaper, but how often do people replace their cars?”

Chin continued to say that many people blamed the government because of their lack of understanding of GST.

For example, he said many shops have boycotted the sale of prepaid cards because the issue of imposing GST on prepaid cards had caused so much confusion, as well as the 10 per cent service charge collected by hotels and food and beverage (F&B) outlets that had been practised without any problems until the GST was introduced.

While the government’s intention to abolish the 10 per cent service charge is good, Chin said the administration should keep in mind that more than 100,000 waiters in this country earning between RM350 to RM1,200 a month on average are reliant on service charge.

“The government has an obligation to take care of its (waiters’) welfare.”

Chin said the government aimed to bring in RM22 billion in revenue from GST, but the desired target could not be achieved if the current confusion and consumers’ sentiments were not addressed.

If the Malaysian Ringgit continued to fall, the GST might even affect domestic demand, he said.