The much anticipated goods and services tax (GST) will be implemented in less than five months. Consumers will soon be experiencing a change in the way taxes are collected, where GST at six percent will soon  replace the sales and services tax (SST), which averages 10 percent.

There has been active debate on the benefits and concerns with regard to the implementation of the GST, but we must remain optimistic that this new tax regime will pave the way for a more sustainable socio-economic growth for Malaysia. For the first time, our own consumption pattern will decide on how much we pay as tax.

To date, the GST has been successfully implemented in 146 countries and it has proven to be a more stable tax collection regime, directly improving a country’s fiscal position and for Malaysia, the over-reliance on income tax and petroleum tax as the only major income source of the country will be mitigated.

With so much information made available, it cannot be denied that the key concern of GST implementation is inflation, where the average consumer is worried if this would have an adverse impact on their livelihood.

With subsidy rationalisation efforts gaining momentum, coupled with the recent announcement of the complete removal of petrol subsidy beginning December 2014, consumers are even more worried if GST will have a further impact on their livelihood.

The government has continued to emphasise that the GST will cause 50 percent of products become cheaper, while 40 percent will remain unchanged and 10 percent to see a marginal increase.

While this is being realistic, in actual fact this may not be achieved if suppliers do not pass on the necessary tax savings through the value chain.

Is government ready to compel price slashing?

The current pressing issue is whether the government is ready to compel suppliers and manufacturers to slash prices in line with this reduced tax incidence? Will the suppliers and manufacturers succumb to the urge of profiteering by unfairly increasing prices?

Effective enforcement activity will be the determining factor if consumers are to be burdened by increased cost of living due to implementation of the GST.

While the government embarks on various fronts to prepare the country for GST, concerted efforts must be outlined to strategically disseminate information to businesses on the provisions of the Price Control and Anti-Profiteering Act and describe the type of action that can be taken against offenders.

The government must be committed to exercise its political will to act swiftly should there be profiteering activity. It is of concern that to date only 50 percent of businesses have registered as the Dec 31, 2014 deadline looms, indicating that many may still not be aware of the implementation of GST.

Equipping consumers with Shopper's Guide

It is welcomed that consumers will be equipped with a Shopper’s Guide on pre- and post-GST prices. This will help consumers to monitor price movements and immediately report if profiteering activity is suspected.

Retailers, on their part, must take the necessary steps to report incidents of price increases by suppliers and manufacturers to the relevant authorities, so that action can be taken.

In conclusion, we all have to discharge our role and responsibility effectively to ensure that the socio-economic well being of Malaysia and its people remains our top priority - or else we risk contracting domestic spending if consumer confidence declines due to high inflation. This will ultimately have a direct negative impact of our Gross Domestic Product.

AZLAM SHAH ALIAS is director of government and corporate affairs with British hypermarket chain Tesco Stores Malaysia Bhd.