Who benefits from the zero-rated GST?

Prices should come down at every stage after the GST was zero-rated, but in some cases, they have gone up instead.

TK Chua, Free Malaysia Today

What does it tell us when we have more complaints received by the domestic trade and consumer affairs ministry after the goods and services tax (GST) was zero-rated?

In many cases, prices have actually gone up instead of coming down.

The GST, as we know, is not a “single stage” tax like the sales and services tax (SST). Therefore, when the GST is zero-rated, the prices should rightly come down by more than 6%. The reason is as follows:

Many traders, as we understand, did not claim the refunds due to them. They just passed on the tax to the final consumers. For this reason, I think consumers are paying more than the 6% imposed in the GST. For this reason too, I think the government collected more in GST than it originally envisaged.

If we zero-rated the GST, prices should come down at every stage, resulting in final prices to consumers going down at more than 6%. But thus far, prices have not come down. In some instances, they have gone up instead.

May I know who has benefited from the zero-rated GST if the benefit in the form of lower prices has not reached the consumers? I can only derive two conclusions from this: first, our traders are profiteering from the zero-rated GST and second, our enforcement agencies are hopeless in dealing with it.

If our consumers derive no benefit from the zero-rated GST, what is likely to happen when the SST is reintroduced in September? Would the consumers be asked to pay SST with GST “embedded” in it? Would prices escalate beyond the SST rates?

We keep hearing that the government will return RM23 billion (RM44 billion from GST minus RM21 billion from SST) to the people. Is this true? If the people enjoy no benefit from lower prices, may I know where the RM23 billion has gone? Food for thought again.