Finance minister offers to meet FMM after firms blame SST for rising costs

Finance Minister Lim Guan Eng speaks during a press conference at the Education Ministry in Putrajaya February 14, 2019. — Picture by Yusof Mat
Finance Minister Lim Guan Eng speaks during a press conference at the Education Ministry in Putrajaya February 14, 2019. — Picture by Yusof Mat

KUALA LUMPUR, Feb 28 — Lim Guan Eng said he would meet the Federation of Malaysian Manufacturers (FMM) over a joint-survey concluding that the Sales and Services Tax (SST) raised operating costs for manufacturers by up to 10 per cent.

Speaking to a press conference today, the finance minister said data from the Statistics Department and the prevailing inflation rate contradicted the findings of the study done jointly by the FMM and the Malaysian Institute of Economic Research (MIER).

“The inflation rate for the entire 2018 is only at 1 per cent, compared to other GST at 3.7 per cent. At the final month of December, it was at 0.2 per cent. Our challenge is to ensure that the cost of living can be reduced and people can benefit from the low Consumer Price Index (CPI).

“So I am willing to meet with the FMM to see where is the source of the complaint about price increases because it’s not explained by facts and the figures provided by the Department of Statistics and this is the same set of figures that was used by the previous government.

“So we used the exact same formula and weightage. So if it’s 1 per cent compared to 3.7 per cent the facts speak for itself,” Lim said.

Insisting on the accuracy of the government’s data over the FMM and MIER’s study, Lim said he wanted to meet with them as soon as possible to understand their complaints regarding SST.

Although conceding the SST might have had teething problems due to its rapid rollout last September, he said he was also keen to learn the root cause of manufacturers’ grouses.

Lim wanted to know if these were demonstrably linked to the SST or due to other structural issues.

English daily The Star reported FMM president Datuk Soh Thian Lai had said at the FMM-MIER Business Conditions Survey brief that about 85 per cent of the Malaysian manufacturers have witnessed a rise in production costs due to SST in the second half of 2018.

The survey also reported that manufacturers were turning cautious for the remainder of 2019.