Increase in prices will not be much

SST will be implemented at eateries by Sept 1.

CONSUMERS can expect a hike in prices for certain goods after the implementation of the Sales and Service Tax (SST) on September 1.

Sunshine Bakery Sdn Bhd managing director Tan Kim Seng said the price for baked goods was expected to increase from 5% to 10% after the implementation.

“The increase will not be too high as not all raw materials are subjected to SST such as flour and sugar,” he said.

“However, ingredients such as margarine will have to increase because of SST,” he said, adding that plastic bags used to package the baked goods would also go up in price.

“We will make sure that the price of baked goods will still be affordable, as we not only supply to bakeries in town but also schools, burger stalls and rural areas,” he added.

The new SST will replace the Good and Services Tax (GST), which was zero-rated in June.

Tan says prices of baked goods will only increase by 5% to 10%

The sales tax would be rated at 10% while service is set at 6%.

Tan said there would be a meeting with the Malaysian Bakery, Biscuit, Confectionery and Mee Merchants’ Association to determine the range of price increase allowed for baked goods.

“The meeting will involve entrepreneurs in the baking industry to discuss the implementation of SST,” he said.

“As an example, a sausage bun now costs about 85sen and after the SST, it is estimated to be about 90sen.”

Lee Fung Engineering Trading Co joint owner Melinda Lim said she expects a 10% drop in business during the implementation of SST.

Lim hopes the Government will be more considerate of smaller businesses.

“In September, the price of goods will return to when GST was implemented, resulting in customers buying fewer products.

“My customers are buying more goods during the tax holiday as it is 6% cheaper than before,” she said, adding that her customers still had a few weeks left to enjoy the reduced price.

“All we can do is hope business will slowly pick up once our customers are used to the SST,” she added.

Lim hopes the Government would be more considerate of small businesses.

“Although the SST does not have a big impact on small businesses, I believe that the Government should still be mindful and either reduce the rate of SST or abolish it for all minor enterprises,” she said.

“I too trust that customers will understand that the increase in the price of goods is not because of the small businesses but the Government itself.

GM Lokking Enterprise owner Lee Ng Ean Sen said prices of local and imported bags sold at his shop would not change after Sept 1.

Ng says the implementation of SST is still better than GST.

“Having said that, I do not think business will improve right away after the SST is implemented as people might not want to spend during that period,” he said.

“I want to tell customers that they should not worry as things will just go back to the way it was before the implementation of GST in April 2015.

“Hopefully, once people have more confidence about spending money, business will start picking up.”

Ng felt that the implementation of SST was better than GST.

“Before this, GST was implemented on all goods and services but now, the sales tax is only imposed on manufactured and imported products.

“There were a lot of levels with regards to GST, whereby a 6% GST was added into every layer from the manufacturer to the consumer.”

“This can amount to more than a 6% increase in price for customers, which is why the SST is favoured over the GST,” he added.