Johari: Core inflation stable, no plans to cut GST

The government does not plan to change the rate of the goods and services tax (GST) based solely on short term inflation fluctuations, said Second Finance Minister Johari Abdul Ghani.

He said the spike in inflation to 3.2 percent in January 2017 was closely tied to an increase in fuel prices and the ringgit depreciation against the US dollar.

"(However) core inflation - excluding fuel prices - has remained stable at 2.3 percent - compared to 2.1 percent in 2016 - in which we should not expect massive price increases," Johari said when contacted by Malaysiakini.

Yesterday PAS deputy president Tuan Ibrahim Tuan Man proposed that GST rates be cut following a rise in the Consumer Price Index from 1.8 percent in December 2016, to 3.2 percent this January.

He argued that higher price of goods equated to higher GST collection, and thus should be reduced to ease the burden on the public.

Johari however noted that many essential goods were GST exempt, and at six percent, was the lowest in the region.

According to the Department of Statistics, among major groups which recorded increases in the indices were transport (8.3 percent), food and non-alcoholic beverages (4 percent), health (2.5 percent), education (2 percent) and housing, water, electricity, gas and other fuels (1.9 percent).

In the food sub-group, oils recorded a significant 37.9 percent hike in price while vegetables, fish and seafood and fruits cost between 2.1 percent to 7.8 percent more compared to January 2016.- Mkini