PETALING JAYA : The expanded Sales and Service tax (SST) may have a limited short-term effect on inflation, and to prevent dishonest traders from profiteering, economists say Malaysians play a crucial role in curbing unnecessary price hikes. They advise consumers to be vigilant when shopping and avoid buying products from dishonest traders. Economist Geoffrey Williams said consumers must be tough on companies that exploit the implementation of the expanded SST and raise prices unnecessarily. He said they can report such companies for profiteering to the authorities or even name the company on social media. “Naming and shaming profiteers online is very effective, as well as boycotting the worst offenders. “But, this requires group action where NGOs and consumer groups can play a role,” said Williams. He also said companies could play a role by being transparent with prices and having comparisons with their competitors. “Those that treat customers well will keep and gain customers and those with bad attitudes will lose business,” said Williams. He added that consumers should be aware of which products are affected under the expanded SST when they go shopping. “If they see prices rising on products that had the same tax rate, they can report it to the authorities for profiteering. “The effect on inflation will be limited and temporary because this is a one-off effect on only a small sample of goods and services. Most of the consumer price index constituents are unaffected,” added Williams. He was commenting on the SST expansion which began on July 1 which saw zero rate taxes remaining for essential goods, while a rate of 5% to 10% was imposed on non-essential items. An 8% service tax will be imposed on rental or leasing services, with no tax imposed on residential housing, reading material, monetary leasing and tangible assets outside Malaysia. A 6% service tax will be levied on construction work services related to infrastructure, commercial and industrial buildings. Socio-Economic Research Centre executive director Lee Heng Guie said consumer activism played a crucial role in addressing unnecessary price hikes and Malaysians themselves should be vigilant and report any unjustified price hikes to the authorities. “To manage price pressures, the government can improve price monitoring, providing clear communication to the public, and strict enforcement of tax compliance to prevent price gouging,” said Lee. He also said the government could implement awareness campaigns and maintain clear guidelines as well as strict enforcement of tax compliance to prevent excessive profiteering. The inflationary effects from the implementation of the expanded SST, he said, was not expected to have a lasting impact on the country. “While price adjustments are anticipated, particularly on non-essential items and services estimated between 0.5 and 1 percentage points in the short-term, this will likely taper off over time,” added Lee. He said low- and middle-income earners were likely to be affected by the expanded SST implementation despite exemptions on essential items and cash handouts such as Sumbangan Tunai Rahmah by the government. “The increase in SST on a broader […]
4天前
PETALING JAYA : Consumers should brace themselves for a gradual increase in prices of goods following the implementation of the new electricity tariffs effective July 1, say business groups. This is because manufacturers and those in the affected sectors may not be able to absorb higher costs and would likely pass on to consumers. SME Association of Malaysia president Chin Chee Seong said it is too early to gauge the overall increase in electricity bills for businesses. “It is difficult to say how much their electricity bills will increase at the moment. “Talk among some SMEs is that there is likely to be at least a 20% increase in electricity bills,” he said when contacted yesterday. Chin said the association will gather feedback from its members to determine how much more they have to pay for their electricity. Asked whether the SMEs will absorb the higher electricity costs, Chin said it is unlikely. “Most of them would not absorb the cost and pass it down to either their supply chain or consumers. “We should expect to see an increase in prices, especially among the SMEs, food and beverage, and the retail sectors,” he said. Federation of Malaysian Business Association vice-chairman Nivas Ragavan said some businesses may try to absorb the electricity cost increase, but not entirely. “Manufacturers have always tried to absorb cost increases where possible through efficiency measures and cost optimisation. “However, with rising cumulative costs such as raw materials, logistics, labour and now energy, many, particularly the SMEs and export-driven businesses with thin margins, will not be able to absorb the full cost,” he said when contacted yesterday. He said the manufacturing sector is expected to see its electricity bills increase between 5% and 7%. “For energy-intensive industries, the impact could be more significant, especially if they are not eligible for the Imbalance Cost Pass-Through rebate,” he added. As a result of this, Nivas said that it is likely that some portion of the increased energy cost will be passed down the supply chain. “This could take the form of adjusted pricing to downstream partners and eventually may have an impact on consumer prices, depending on the sector and product,” he said. He noted that some manufacturers will try to minimise the increase in cost where possible to remain competitive, especially in global markets. Federation of Malaysian Manufacturing (FMM) president Tan Sri Soh Thian Lai said the new electricity tariffs will not have a uniform impact on the manufacturing sector and will vary according to electricity usage. “FMM understands that 70% of medium voltage customers, many of whom are industrial users, will have a reduction in electricity bill ranging from 4% up to 18% depending on the load factor. “The higher their load factor, the higher the reduction in their bills,” he said when contacted yesterday. However, Soh said the remaining 30% with a low load factor may see an increase of between 3% and 10% in the electricity bills. “Some customers in this category have installed solar […]
5天前
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