569 goods drop in price after SST introduced

The sales and services tax has a lower impact on the people, says the finance ministry. (Bernama pic)

PETALING JAYA: Finance Minister Lim Guan Eng said an analysis last year showed 569 goods in the market indicated a price drop after the implementation of the sales and services tax (SST) last year.

In a written parliamentary reply, Lim said the analysis was carried out on the prices of 900 daily essential goods, from May to December 2018.

According to the analysis, Lim said on average, 63.2% of 900 goods recorded a price drop.

He also said the total collection of SST for 2018 was RM5.4 billion, which exceeded the targeted collection of RM4 billion after the implementation on Sept 1, 2018.

“The coverage scope of SST is smaller compared to the goods and services tax (GST), helping to ease the burden of the people,” said Lim in a written reply to Aaron Ago Dagang (GPS-Kanowit) yesterday.

Lim said the collection for SST this year is expected to be RM21 billion, less than the RM44 billion earlier estimated for GST in 2018.

“The burden of SST on consumers is way less because RM23 billion was returned to the people in the form of a small tax amount.

“The reduction in tax payment will mean the people have more disposable income compared to before,” he said.

Lim also said the average inflation rate in 2018 was 1% year-over-year (yoy), which was the lowest recorded in nine years.

“In the first four months of the previous administration, the average inflation rate was 1.7% yoy.

“This differs from the first eight months of the Pakatan Harapan administration when the average inflation rate was lowered by 0.6%,” he said, noting that the average inflation rate reduced a further 0.7% in January.

“This is a positive effect of the abolition of GST and implementation of SST,” said Lim.