Malaysiakini News

72pct necessities see prices drop after zero GST - gov’t

Published:  |  Modified:

The zero-rating of the GST has seen the average price of 72 percent of necessities drop between one percent and about 13 percent.

This was revealed in a survey by the National Price Council under the Ministry of Domestic Trade and Consumer Affairs, as reported by the Malay Mail today.

The survey, which was provided by the Domestic Trade and Consumer Affairs Minister Saifuddin Nasution Ismail, also showed that the prices for 97 percent of goods which were previously taxed under the GST had fallen since the new government effectively abolished the tax on June 1.

The prices fell between 0.87 percent to 8.12 percent.

Meanwhile, the prices for 56 percent of goods that were already zero-rated before June 1 also fell, decreasing at a rate between 0.04 percent and 12.94 percent.

However, there were price increases for 24 percent of consumer goods sampled, such as white prawns, which increased 0.03 percent and dried squid, which went up by 42.33 percent.

The prices for four percent of goods remained the same.

Saifuddin said these price increases, which mostly affected fresh food like seafood and vegetables, were due to supply and demand.

The survey also found that complaints over prices increasing or remaining the same after the new government zero-rated GST were mainly about food and drinks at eateries.

"Complaints were focused on food and drink prices, mostly at restaurants and warungs," Saifuddin was reported as saying.

‘Be ethical’

In the month of June, 968 complaints were recorded about prices not falling after the zero GST, while 1,023 complaints were about goods becoming more expensive.

Half of these complaints were related to food and drinks, the ministry found.

Restaurants and cafeterias were the most complained-about at 42 percent, while supermarkets comprised 15 percent of the complaints.

"Businesses must be ethical," Saifuddin said.

The sample size for the survey was 417 consumer goods from 1,688 premises that included items that were taxed, as well as those already zero-rated before June 1.

The average prices were compared on May 28 versus June 25 this year.

Saifuddin also revealed that the ministry has already issued 375 warnings to vendors for prices of goods that have remained the same after adjusting the GST.

However, he said he does not want to antagonise businesses, but instead would like to "educate" them.

Saifuddin added price movements would be impacted after the Sales and Services Tax (SST) is reintroduced on Sept 1 this year, but any changes in the prices of goods will have to depend on the SST rate, which has not been decided yet.

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