Economists have warned the government against postponing the increase in tax rates and rationalisation of subsidies despite calls from both sides of the political divide to defer their implementation.
Chong Yoong Wen, an economist with think-tank Bait al-Amanah, said businesses have already incurred “menu costs” – the cost incurred of price adjustments – following an increase in the sales and service tax (SST) rate which took effect on March 1.
Any deferment of the new rates would result in businesses having to incur additional costs to readjust their prices again in future, he said.
Postponing the implementation of the new tax could affect consumers as the cost incurred in multiple price adjustments may be passed down to consumers, he said.
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Photo credit : BERNAMA.
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