Consumerist: Echoes Consumer Fears On GST!

Dato Jacob George

Govt must not hide anything about GST

Cindi Loo


It is time for the government to come clean on the impact of the goods and services tax (GST) on prices of goods.

Instead of merely issuing statements which do not at all allay consumer fears, the relevant authorities have to seriously study the price effects on the people.

Consumers Association of Subang and Shah Alam president Datuk Dr Jacob George has defended the efforts of NGOs and related organisations having discussions about the potential effects of GST on various products and services, arguing they are not “scare tactics” as interpreted by the government.

The market is merely reacting to uncertainty, given that there is much to speculate on the prices of goods.

“The government should not be pussyfooting around and has to come clean on the real impact of GST on products and services. The panic we are seeing right now is merely an echo of the market sentiments as there will definitely be an impact on consumers,” he told Theantdaily.

He was responding to a series of articles recently highlighting the potential additional costs consumers have to pay following speculated price increases on various products and services, such as medicine, healthcare, movie tickets and even interbank transfers.

The Malaysian Insider quoted Federation of Private Medical Practitioners’ president Dr Stephen Chow as saying that although the drugs listed on the National Essential Drugs List will be zero-rated, only 208 out of the 2,900 medications listed are of different variations while the rest are more or less the same, and these medicines are not for treatment of critical diseases or complications that may arise from treatment.

And Association of Private Hospitals of Malaysia president Dr Jacob Thomas has painted a grim picture, warning that private healthcare costs will increase by 5% following the implementation of GST as doctors working there are not employed by the hospitals but are independently contracted, arguing that outsourced services are deemed taxable by the Customs Department.

But Customs Department director-general Datuk Seri Khazali Ahmad has retorted that the price will only rise by another 1% to 2%, as other items taxed by the current service tax system will be exempted.

Similar concerns are raised over movie tickets, whereby movie news portal Cinema Online has speculated that the 6% GST imposed on top of the existing 25% entertainment duties will bring the tax to a whopping 31%, and a price increase on food and drinks.

And the Finance Ministry has announced on Facebook that GST will have an impact on some service charges in banks.

George argues that reactions to these announcements are an indication that Malaysian consumers are not ready to see the GST being implemented in full force and urges the government to push the implementation back another two years until the issues are ironed out.

“The economy is expected to slow down by next year, especially in places like Europe and the US and markets including ours will be affected.

“A lot of people will be affected. The government insists on singing a positive tune, that we will not be affected by these changes… GST can have a major impact on low- and middle-income families.”

If the government is adamant about implementing the GST on April 1 next year, it must be prepared to come forward and tell the truth, that is, whether the GST is the result of the country’s current financial situation.