PAS: Cut GST to match rise in inflation

PAS has urged the government to cut the six percent Goods and Services Tax (GST) in light of a spike in inflation.

The Consumer Price Index was up by 3.2 percent in January 2017 compared to the same period last year and was up by 1.8 percent compared to December 2016.

"We urge the government to cancel the GST completely. If this is not possible, at least reduce the rate in line with the rise in inflation to reduce the rakyat's burdens," PAS deputy president Tuan Ibrahim Tuan Man said in a statement.

He said this would not affect government revenue from GST collection as price of goods are becoming higher.

This comes after analysts estimate that inflation could continue to rise to beyond four percent in the next three months, following ringgit depreciation which raises import costs.

Tuan Ibrahim also cautioned that inflation rate understates on-the-ground price hikes.

"Nasi lemak sold at RM2 will not be priced RM2.08 due to four percent inflation, but is likely to go up by 10 or 20 sen, or five to 10 percent more," he said.

According to the Department of Statistics data released last week, among major groups which recorded increases in the indices was 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