KOTA KINABALU: Some bakery products may experience a price hike when the Sales and Services Tax (SST) comes into effect next month.

Sabah Confectionery and Bakery Association president Peter Khoo Po Min said the most popular products such as white bread, wholemeal bread, buns and certain cakes would not be affected by SST as flour, yeast, margarine and sugar were exempted from the tax.

Khoo, who is also a director of Multi-Bake Sdn Bhd, said SST was imposed on butter, cheese, chocolate, cocoa powder, chocolate chips and jam, among other raw materials.

Therefore, bakery products that included these raw materials might be adjusted in price, he said.

“The price of bakery products will depend on whether operators are willing to absorb the cost or not.

“Some of our members who do not wish to absorb the cost of SST may pass it along to consumers,” he said when contacted yesterday.

Khoo also said the sale of mooncakes is likely to be bolstered by the zero-rated Goods and Services Tax (GST) and exemption from the Sales and Services Tax .

He said the prices of mooncakes were also expected to drop, albeit slightly this year.
“This is because we have ordered the boxes and packaging more than two months ago when GST was still in effect.

“So while we will adjust the mooncake prices lower by RM1 to RM2 per box, the price reduction will not amount to six per cent of GST as the cost of packaging has to be taken into account,” he said.

Khoo went on to say that mooncake was among the items exempted from SST.

As such, he expected favourable sales this year given that mooncakes were free from GST and SST.

Nonetheless, he said the sale of mooncakes would normally spike at the last minute as consumers scrambled to purchase the traditional Chinese pastry as gifts to family and friends.

Foo showing one of the giant mooncakes he baked.

Meanwhile, Port View Euro Bakery managing director Foo Hoe Weng said the mooncakes sold at the bakery was now on average RM1 cheaper per piece as GST had gone zero-rated.

He said the cost of raw materials for mooncakes had maintained the same this year.

“Now that GST is no longer imposed on raw materials, we have to pass that down to consumers.”

Foo added that the bakery would absorb the extra costs brought about by SST when the tax was reintroduced on September 1.

He also said that sale of mooncakes was lukewarm currently, but would pick up in the last one to two weeks before the Mid-Autumn Festival on September 24.

On another note, Foo pointed out that the price of butter and cheese have increased five times in the past year.

“A 25-kilogramme box of butter from Australia costs RM1,000,” he said, adding that the price hike could be due to the currency.