THE inflation rate for goods and services, especially food, has been lower since the goods and services tax (GST) was abolished and replaced with the sales and services tax (SST).

Deputy Domestic Trade and Consumer Affairs Minister Chong Chieng Jen said the average inflation rate between December 2017 and May 2018 – six months before GST was abolished – was about 2%.

In comparison, the average inflation rate between September 2018 and February 2019 – six months after the SST was introduced – ranged between zero and 1%, Chong told the Dewan Rakyat.

“From this, we can see that inflation has been more controlled and lower after SST was introduced compared to the previous tax system, when GST was in place,” Chong said in reply to Rubiah Wang (GPS-Kota Samarahan).

Several measures are in place to prevent a spike in inflation once the government’s targeted petrol subsidy system begins next year, he said.

Under the system, the government will no longer give out blanket fuel subsidies for petrol and the aid will only be channelled directly to lower-middle-income and low-income households.

Subsidies of RM30 per month will be given out to qualified households to offset the rise in prices for RON95 in the peninsula.

RON 95 is currently capped at RM2.08 per litre but next year, it will be floated just like the premium RON 97 petrol.

Chong said the price of RON 95 will be floated gradually so as to not shock the market while the ministry’s officers will be deployed to stop price-gouging.

“We are finalising a study into the supply chain for vegetables and fish to determine the middlemen along that line who inflate prices.”

At the same time, the My Competition Commission (MyCC) is reviewing the approved permits (AP) system to eliminate cartels in the food import business that can drive prices up. – November 27, 2019.