Thursday, March 21

The fallout of Goods and Services Tax

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COMPLAINTS continue to ring out as businesses indiscriminately raise prices under the pretext of complying with the terms and conditions of the newly-imposed Goods and Services Tax (GST).

Many items not covered by GST, are also copping an unreasonable six per cent tax, leading to “consumer panic” in the market.

Even in the face of strenuous opposition, the Malaysian government came through with the decision to implement the new tax regime on April 1.

Anxious consumers rushed to hoard goods before the advent of the “golden age of taxes.” They are concerned about the six per cent increase in the price of goods, and even more worried about the chain reaction GST will bring to the market as they try to save every sen they can. In fact, the worst is yet to come – when people start hoarding out of desperation.

What the people are truly dissatisfied or worried about is that on the actual day of GST implementation or even the days and months that follow, many businesses will continue to injudiciously increase prices and wantonly charge six per cent even for the “exempted” goods.

Many consumers have uploaded pictures of their receipts (invoices) through social networks. Besides lamenting the costlier goods, they also intend to show many businesses are unethically and randomly charging taxes in the name of GST.

Many items not listed as taxable under GST, such as newspapers, are also charged six per cent tax. Even people having their daily cuppa at local coffee shops are “obliged” to accept being taxed under GST. This has resulted in further chaos to the market.

Many officials are still insisting and stressing that the implementation of GST will not affect the people or increase their burden but will instead help to increase revenue.

Yes, this all sounds very well and good.  But the efficient implementation of GST is far more important than wrapping the new tax system up with “sweet words.” Now, the market prices of most goods are rising chaotically and it will be a test of political wisdom to assuage the “consumer panic” prevailing amidst the turmoil accompanying the “golden age of taxes.”

Although we all know price hikes are inevitable with GST, looking at the receipts (invoices) uploaded on the first day of implementation bears out the unmissable fact that many businesses are abusing the newly-introduced tax system to raise prices to an astounding extent.

To safeguard our interests as consumers at this initial “chaotic time,” it is necessary for all of us to be smart while shopping. When making payments, we must see to it that the new tax system is implemented fairly, and report to the authorities if we are subjected to unscrupulous treatment.

The authorities will have to mete out harsher punishment to businesses that abuse GST and taking consumers for a ride. If not, then unreasonable increase in prices can spiral out of control – to the detriment of not only the tax-paying public but also the government’s coffers through ethical practice by exploitative quarters.

The government should strengthen the country’s economy through the GST by actively improving its rating and boosting international confidence in Malaysia’s economic management. Then, all those “sweet words” will eventually become credible words borne out by tangible and positive results.

The government should protect the interests of consumers and ensure the Goods and Service Tax will not burn a big hole in the pockets of end-users by making certain that businesses charge the tax in fair and honest manner.

This is a matter of great concern and urgency if even greater resentment for GST is to be avoided. (From Oriental Daily)