News & Articles Cost of 8 categories down with GST
Cost of 8 categories down with GST
26 Mar 2015
Allegations that the prices of all goods and services will increase with the implementation of the Goods and Services Tax (GST) from April 1 are baseless because only some will, some will fall and some will be the same.
A research on the Consumer Price Index (CPI) shows that eight categories of goods and services will result in price reductions.
Clothing and footwear will decline 2.71%; communication (1.86%); furnishing, household equipment and maintenance (1.57%); restaurants and hotels (1.2%); transportation (0.94%); alcoholic beverages and tobacco (0.73%); housing, water, electricity, gas and fuels (0.12%); and miscellaneous goods and services (0.08%).
The prices of other categories of goods and services in the CPI basket, such as education, health, recreation and culture, food and non-alcoholic beverages and food away from home, are expected to increase slightly by between 0.67% and 2.21%.
This is because currently these goods and services are not subjected to sales or service tax.
Some goods will also remain unchanged as some companies plan to maintain product prices to stay competitive.
Malaysia’s GST model, despite the many negative comments, is designed to be a progressive tax with the long list of exempted, zero-rated and relief supplies.
The government has maintained that basic food items, education and petrol will not be subjected to GST.
This is to ensure that the low- and middle-income groups are least affected like in Vietnam’s and Ethiopia’s models.
A research on the Consumer Price Index (CPI) shows that eight categories of goods and services will result in price reductions.
Clothing and footwear will decline 2.71%; communication (1.86%); furnishing, household equipment and maintenance (1.57%); restaurants and hotels (1.2%); transportation (0.94%); alcoholic beverages and tobacco (0.73%); housing, water, electricity, gas and fuels (0.12%); and miscellaneous goods and services (0.08%).
The prices of other categories of goods and services in the CPI basket, such as education, health, recreation and culture, food and non-alcoholic beverages and food away from home, are expected to increase slightly by between 0.67% and 2.21%.
This is because currently these goods and services are not subjected to sales or service tax.
Some goods will also remain unchanged as some companies plan to maintain product prices to stay competitive.
Malaysia’s GST model, despite the many negative comments, is designed to be a progressive tax with the long list of exempted, zero-rated and relief supplies.
The government has maintained that basic food items, education and petrol will not be subjected to GST.
This is to ensure that the low- and middle-income groups are least affected like in Vietnam’s and Ethiopia’s models.
Source: The Rakyat Post