The Treasury conceded there will be an inflation spike when the goods and services tax (GST) is implemented but was confident things would quickly stabilise.
"According to the experience in Singapore, Australia and other countries, there will be a small spike but it will taper off within a year or so," Treasury chief secretary Mohd Irwan Serigar Abdullah (left, in picture) told journalists in Kuala Lumpur yesterday.
Mohd Irwan, who attended a briefing on the Auditor-General's Report 2013, said the focus will instead be on enforcement against retailers who try to take advantage by increasing prices of their goods even if they were unaffected by the GST.
He lamented that some had claimed GST was a cascading tax where the six per cent rate imposed at every level of the production chain would snowball, pointing out there would be some sections entitled to rebates.
Asked whether GST would be imposed on fuel, Mohd Irwan said the government was still studying the matter.
"We have until April 2015 (when GST comes into force) to decide, we have ample time," he said.
He added the government was also still deciding on a suitable time to roll out its subsidy rationalisation programme.
Mohd Irwan also addressed criticism that there were too many government-linked companies with too little gains, stating that the returns may not always be immediate.
"Many of the GLCs go in to research and they take time to get returns, not many private companies want to go into research," he said.
He added that the government was also in the process to privatise GLCs which are profitable but declined to disclose their names.
"According to the experience in Singapore, Australia and other countries, there will be a small spike but it will taper off within a year or so," Treasury chief secretary Mohd Irwan Serigar Abdullah (left, in picture) told journalists in Kuala Lumpur yesterday.Mohd Irwan, who attended a briefing on the Auditor-General's Report 2013, said the focus will instead be on enforcement against retailers who try to take advantage by increasing prices of their goods even if they were unaffected by the GST.
He lamented that some had claimed GST was a cascading tax where the six per cent rate imposed at every level of the production chain would snowball, pointing out there would be some sections entitled to rebates.
Asked whether GST would be imposed on fuel, Mohd Irwan said the government was still studying the matter.
"We have until April 2015 (when GST comes into force) to decide, we have ample time," he said.
He added the government was also still deciding on a suitable time to roll out its subsidy rationalisation programme.
Mohd Irwan also addressed criticism that there were too many government-linked companies with too little gains, stating that the returns may not always be immediate.
"Many of the GLCs go in to research and they take time to get returns, not many private companies want to go into research," he said.
He added that the government was also in the process to privatise GLCs which are profitable but declined to disclose their names.
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