KUALA LUMPUR, Dec 9 (Bernama) -- The goverment will use the Price Control and Anti-Profiteering Act 2011 to ensure businesses do not hike prices of goods indiscriminately once the Goods and Services Tax (GST) is implemented in April 2015.
Deputy Finance Minister Datuk Ahmad Maslan said in countries with the GST, prices of goods will generally go up by 1.8 to two per cent in the first year of implementation.
"The prices will usually rise because they (businesses) do not scrap the 10 per cent tax from the original system, but continue to add the six per cent from the GST system to the price.
"So we will use the existing Act to ensure there is no abuse of the GST when it is implemented," he said in reply to a supplementary question from Senator Datuk Abdul Rahman Bakar at the Dewan Negara sitting here today.
When tabling Budget 2014 last October, Prime Minister Datuk Seri Najib Tun Razak announced the implementation of the GST at a rate of six per cent with effect from April 1, 2015.
Earlier, in reply to a question from Senator Datuk S Nallakarupan on measures taken by the government to ensure the people understand the implementation of the GST, Ahmad said besides continuous campaigns, the government will also come up with a 'shopper's guide' of the expected prices of certain goods and services three months before the implementation of the GST.
"We will continue these campaigns so that we can explain to the people that the GST is a more transparent and just tax for consumers that would also generate revenue for the country," he said, adding the tax would also bring down the cost of doing business, which in turn would lower the prices of goods and services.
Tax evasion in the black or shadow economy in Malaysia and developing countries cost the economy billions of ringgit, but the implementation of the GST would reduce bureacracy, ensure transparency and make prices more reasonable, making it very difficult for businesses to evade tax, he said.