ARA Asset wants clearer SST guidelines to prevent price rises

KUALA LUMPUR: There should be clearer guidelines on the Sales and Services Tax (SST) to prevent manufacturers from raising product prices based on the highest tax tier, which will lead to increased retail prices, said ARA Asset Management Ltd.

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 toilet rolls in malls to the prices of ingredients used by our food and beverage tenants have escalated,” said Lim in ARA Asset’s 2019 Budget wish list yesterday.

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 passe on to consumers who are discouraged from eating out or visiting the shopping aisles.

“A simpler and clearer SST can help keep a check on manufacturers’ tendency to raise prices,” said Lim.

She hopes the government would be a business-growth facilitator, not a deterrent and give more emphasis on public transportation infrastructure.

“Consumers are quick to complain through social media when they are 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 said action against retailers under the Price Control and AntiProfiteering Act 2011 was counter-productive as compliance was a time-consuming process that added to costs, which will then be passed on to consumers.

On enhancing public transportation infrastructure, Lim said more efforts, strategic planning and allocation should be given to increase the level of security and accessibility to public transportation so that more people would be eager to use them.

“Rail stations close to shopping malls are definitely a good move.”

Lim said malls should be recognised as tourist attractions.

“We know shopping tourism is an important contributor to the nation’s revenue.”