PETALING JAYA: Two consumer activists fear that the re-introduction of the Sales and Services Tax (SST) from Sept 1 may lead to price inflation and a higher cost of living.
Dr Jacob Gorge, president of the Consumers Association of Subang and Shah Alam, Selangor, said “consumers will definitely be hit by this,” and the cost of living would increase across the board.
Yusof Abdul Rahman, vice-president of the Federation of Malaysian Consumers Associations, also said there would be an increase in prices in the first few months, but that the situation would be “okay after that”.
Finance Minister Lim Guan Eng announced on Monday that the provision of services would be taxed at 6% and the sale of goods at 10%, the same rates as before the Goods and Services Tax came into play on April 1, 2015.
The Pakatan Harapan federal government intends to abolish GST by August.
George said the association had hoped that SST rates should be 4% and below, and was dismayed that the government had announced the rates without getting feedback from consumer advocates.
“With the new Malaysia, there should be more consultation and discussion for feedback from “experts like us, so we can fine tune and come up with a win-win formula”, George said.
Yusof said there was uncertainty about “whether the government will use a wider tax system”. If the tax was applied widely, SST would be charged on all goods which were manufactured or imported and there would be changes in the prices of goods.
However, he believed that prices would rise in the first few months of SST being re-introduced, but “the situation would be okay after that”.