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Wednesday, April 9, 2014

Strong enforcement needed for GST's successful implementation

Published: Wednesday April 9, 2014 MYT 12:00:00 AM 
Updated: Wednesday April 9, 2014 MYT 6:28:34 AM

THE Goods and Services Tax (GST) will soon become a reality with its implementation on April 1, 2015.

While the Perak Consumer Movement (PCM) is broadly supportive of GST, with so much conflicting information available on its impact, it cannot be denied that the average consumer is worried whether the GST would have an adverse impact of their livelihood.

With subsidy rationalisation underway and the recent increase in fuel and electricity prices, which caused a spike in prices of essentials, consumers are now even more worried if the GST will further impact their livelihoods.

Currently a negative picture has been painted on the impact of GST.

PCM believes that GST is expected to bring about, if not in the near-term but in the medium to long-term, a reduction in the prices of goods and services as businesses pass on the benefits of reduced tax incidences to consumers by slashing the prices of goods.

But it remains a worry if this would indeed happen or will the dealers simply pass the tax onto consumers without making any necessary adjustments.

What if businesses take advantage of this by increasing prices of goods and services squarely blaming the GST?

Is the Government enforcement machinery ready to act against profiteers?

The PCM calls on the Government to ensure that all enforcement units, equipped with relevant laws are ready to be fully deployed to attend to consumer issues and grievances with swift action against profiteers.

There is also a pressing need for more strategic and transparent communication from the Government to the public and businesses to create awareness on the GST.

Civil society groups must be roped in to ensure the message is communicated correctly and professionally while consumer associations must be encouraged to set up complaints handling units within their respective areas to support the Government by channelling consumer grievances to the correct enforcement agencies for action.

As the implementation of GST is a paradigm shift in the way tax is collected, consumers especially low income earners should not be left in a lurch for want of action by authorities.

We have seen over the years how traders had profiteered on a handful of price control items announced by the Government during festivities. PCM wonders about the impact when it will involve thousands of products if enforcement is not strengthened.

Perak Consumer Movement

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