Sales Tax On Commercial Sector Reason Why Prices Never Go Down

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KUALA LUMPUR, Jan 22 – The sales tax imposed on the commercial sector is the reason prices of goods do not go down in line with diesel and petrol prices, said PKR’s vice-president Rafizi Ramli. He claimed to be in possession of a government released circular that proved this imposition has resulted in the commercial sector having to pay a higher price for petrol and diesel.

“The sales tax charged on the commercial sector (after discount) for the month of January 2015 is diesel (30.6 sen per litre), RON95 (35.9 sen per litre), RON97 (52.54 sen per litre) and diesel B5 (27.11 sen per litre).” The Pandan Member of Parliament said in a statement today that the information was leaked to him last week by an informer whose identity he promised to protect, but the reference number he provided was sufficient for the media to refer to the Finance Ministry.

He attributed the sales tax imposition as a way for the government to still collect revenues without a backlash from the people who would instead blame the traders for allegedly trying to make a higher profit by refusing to lower the prices of their goods. “I have been repeatedly asked (especially by Umno supporters) as to why prices of goods weren’t lowered when the fuel prices were.

“These questions came following a silent campaign on the social media saying that the Chinese traders were the ones who refused to lower the prices. “One fact that is not known to the public was that fuel prices to the commercial sector weren’t reduced like the ones sold to the public, but instead was raised with the introduction of the sales tax.”

Rafizi added that commercial traders that used a large quantity of diesel and petrol were not allowed to purchase from the average gas pumps like the people are. Instead, they have to purchase the fuel used for industrial purposes in a lump sum straight from fuel companies such as Petronas, Shell, Petron and others.

For the month of January, the per litre prices of RON95, RON97, and diesel set through the managed float system are RM1.91, RM2.11 and RM1.93 respectively. According to Rafizi, the commercial sector on the other hand, had to pay per litre RM2.269 and RM2.236 for RON 95 and diesel.

“This means that factories and the commercial industries have to pay two form of taxes to the government which are the sales tax announced in the monthly circular and also the hidden tax resulting from the obvious difference between the market price and the price set by the government.

“I pay attention to these kind of issues as they become a hindrance to the drop in prices of goods.” He said that in order to be fair to all, the BN-led government should stop all form of taxes and allow the drop in fuel prices be translated into cost reduction in every stage of the sales chain.

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