KUALA LUMPUR: There should be clearer guidelines of Sales and Service Tax to prevent manufacturers’ tendency to raise price of products based on the highest tax tier that ultimately causes further price hike, ARA Asset Management Ltd said.
Its country head June Lim said SST had a long list of tax-exempted goods but the cost of doing business had not decreased.
“Items from the simple toilet roll in the malls’ toilets to the prices of ingredients used by our F&B tenants have escalated,” Lim said in ARA Asset’s 2019 Budget wish list today.
She said manufacturers had different tiers of taxable items in their list of raw materials.
“They have the tendency to raise the overall price of the product based on the highest tax tier. The higher costs are then passed
onto consumers who are discouraged from eating out or visiting the shopping aisles. A simpler and clearer SST can do away with this tendency that causes further price hike,” Lim explained.
She hopes that the government would be a business growth facilitator, not a deterrent and gives more emphasis on public transportation infrastructure.
“Through social media, consumers are quick to complain when they were overcharged for goods and services. The Domestic Trade, Cooperatives and Consumerism Ministry is also quick to act against profiteering.
“Retailers are genuinely pressured by escalating operational costs and have to raise prices in order to continue running a viable business.”
She added that action against retailers under the Price Control and Anti-Profiteering Act (PCAPA) 2011 was counter-productive as compliance is a time-consuming process that add on to costs which will then be passed on to the consumers.
On enhancing public transportation infrastructure, Lim said more efforts, strategic planning and allocation should be given towards increasing the level of security and accessibility to our public transportation so that more Malaysians would be eager to use it in their daily commute.
“Rail stations close to shopping malls are definitely a good move. I wish to see complete shopping and lifestyle hubs integrated with the stations and the bus interchanges being a norm.”
Lim said malls should be recognised as tourist attractions.
“It is unfortunate that the retail industry has been a neglected segment of government planning. Even Tourism Malaysia does not consider many malls as tourist attractions with only a selected few making the cut.
“We know shopping tourism is an important contributor to the nation's revenue. Statistics have shown that revenue from shopping receipts is almost equivalent to that spent on accommodation,” she added.