Profiteering expected to be low
KUALA LUMPUR: Tax experts expect minimal profiteering activities after the implementation of the Sales and Services Tax (SST).
They believe consumers are getting savvier and have better means to punish businesses that inflate prices irresponsibly.
Malaysian Retail Chain Association treasurer-general Datuk Alex Wong said consumers now had the power and could use social media to their advantage, which could result in companies losing business.
“These days, you cannot increase prices irresponsibly, otherwise you will be punished. Therefore, I see minimal profiteering activities after SST is implemented,” he said at the “Masterclass Forum: Impact of GST to SST” organised by CPA Australia in collaboration with the New Straits Time Press.
Baker Tilly Malaysia tax services leader Anand Chelliah said in an open market system, it was impossible for businesses to make excessive profits.
“When the new tax system is brought into the picture, the supply and demand can correspond accordingly.
“In an open market, some businesses may increase their price irresponsibly, taking advantage of the uncertainty in the market. like in this case SST. However, at the end of the day, these uneth-
ical businesses will lose out.”
Experts said SST benefited businesses, promoting ease of doing business and economic growth.
For example, Ernst & Young Tax Consultants Sdn Bhd director Jalbir Singh said unlike SST, companies exempted from GST had an issue with their cash flows, particularly in getting refunds.
“Cash flows should not be a problem with GST, but these companies had complained that they did not get the refunds in time.”
Malayan Banking Bhd head of group tax and performance reporting Surin Segar said SST would help the economy grow.
“SST covers fewer items as compared to GST. Also, GST had the cascading effect (some items are doubly taxed), which increased the cost of doing business.”