Guan Eng confesses that the cost of living is due to supply and demand and not because of taxes

(FMT) – The increase in the prices of goods and services is not entirely due to tax elements such as taxes (SST/GST) as other factors also influence the price movements, said Finance Minister Lim Guan Eng.

He said these included imported goods, depreciation of the ringgit, festive seasons, smuggling activities, drought in producing countries, and profiteering by businesses and traders to reap excessive profits.

“Basically, prices of goods and services are determined by demand and supply in the market,” he said during an interview on Bernama News Channel’s (BNC) “Ruang Bicara” programme here tonight.

Lim urged the people to become wise consumers by taking action, like lodging reports with the domestic trade and consumer affairs ministry, boycotting overpriced products and exposing wrongdoings by going viral on social media.

He said consumers should only buy goods and services when they were absolutely necessary, compare prices and make market research beforehand to get value for money for the products purchased.

Lim said the government was committed to easing the financial burden of the people, especially the bottom 40% household income group (B40).

Through improved SST implementation, the government has returned an estimated tax collection of RM23 billion to the people.

“The return of this tax collection will hopefully stimulate consumer demand and increase investor confidence, thereby boosting the country’s economic growth,” he said.

Lim said the SST only accounted for 38% of the consumer price index basket of goods compared with 60% under the goods and services tax (GST).

He said the government has also introduced measures to ease the burden of the B40 group, which included exempting various goods from the SST.

The SST-exempted goods include sardines, dairy products, tea, chilli sauce, tomato sauce, cereals, yoghurt, kaya, margarine, bicycles and motorcycles under 250cc, he said, adding that for fishermen, they were no longer subject to tax for the purchase of fishing boats.

Lim said tractors and fertilisers were no longer subjected to SST, unlike under the GST regime.

For the housing sector, he said construction materials such as sand, bricks and cement were no longer taxable. Healthcare consultancy and administration, and medical and ambulatory services were also not subjected to SST.