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Gst Inflation

In: Other Topics

Submitted By tyana
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The recent introduction of GST (Goods and Services Tax) in Malaysia has had many scratching their heads into whether there will be a change in the price level of the Goods and Services for better or for worst – so in other words, Does GST has an impact on inflation? Some may argue that since the basic tax rates on most goods at point of sale are set to fall, how on earth can this be inflationary? Yet again, many has predicted that inflation will occur due to the introduction of GST, because GST is a multi-stage tax, cost high; price increase.
Theoretically, the introduction of GST in Malaysia is almost just accompanied by a one-time spike in price level of cost of living, and it should not have an impact at the inflation rate. Ministry of Finance secretary-general Tan Sri Mohd Irwan Serigar Abdullah quoted that: “Prices of some goods may rise, but this should go down later on. Hopefully, this is a one-time spike, after that it (the inflation rate) will moderate downwards.
With all that said, why is price still going upwards at the moment? Probably due to the involvement of some company taking advantages on the introduction of GST, by increasing their selling price or Tax fraud and evasion, for example deliberately inflating invoices to claim greater tax rebates. But as the times goes on the inflation should diminished and the price level for the goods and services will return back to the normal

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