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By Lian Cheng
KUCHING, Oct 29: Deputy Domestic Trade and Consumer Affairs Minister Chong Chieng Jen said the Sales and Services Tax (SST) would not bring down the prices of goods.
However, he said under SST, the prices of goods would be lower, generally.
“Just to be clear, SST will not bring down prices of goods. It would be ridiculous to suggest that. But if you compare SST to GST (Goods and Services Tax), generally, the prices of goods will be a lot lower. That is the situation,” said Chong during a Memorandum of Understanding (MoU) signing ceremony between Polarwood Sdn Bhd and its three major tenants at Sentosa Parade here this morning.
Chong, who is Stampin MP, said his ministry was in constant touch with supermarkets and other retail stores. They need to submit fortnightly a list of the prices of 40 to 50 of their most sellable merchandise, which the ministry monitors.
“GST is a multi-layered tax, so the six per cent is imposed on the retail price. SST on some goods is five per cent and some 10 per cent, but the tax rate is imposed on the cost price. There is a difference, a very big difference,” said Chong.
He added that with SST replacing GST, the federal government would collect RM21 billion less compared to when the GST was imposed.
Chong, who is also Kota Sentosa assemblyman, said under GST, an average of RM43 billion per year was collected as GST tax. Under SST, the federal government had estimated the collection to be RM21 billion annually.
“In other words, there is an additional RM22 billion in the hands of the consumers,” he pointed out.
When GST was implemented, many sundry shops closed down as purchasing power was “sucked up”, where “generally there was a withdrawal from the system” as businessmen opted out.
“Under SST, you have an additional RM22 billion cash in the hands of the consumers. It is up to businessmen on how to get benefits out of the RM22 billion,” he said.
He said when one compared the two systems, SST helped retail businesses, which combined with the manufacturing sector constituted about 15 per cent of the national gross domestic product (GDP). — DayakDaily