How does SST compare to GST on inflation?

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SST's Inflationary Impact Was Lower Than GST's

The Sales and Services Tax (SST) had a less significant inflationary effect compared to the Goods and Services Tax (GST), as evidenced by the inflation rates recorded in 2018 and 2017 respectively. In 2018, following the reinstatement of SST, the inflation rate stood at one per cent. This contrasts with the 3.7 per cent inflation rate observed in 2017 when GST was in effect.
Inflation Rate Comparison

A comparison of the Consumer Price Index between 2018 and 2017 indicates that the implementation of GST resulted in a more substantial increase in prices than SST. The inflation rate in 2018, after SST was reinstated, was recorded at one per cent. This figure is notably lower than the 3.7 per cent inflation rate experienced in 2017 when GST was the prevailing tax system.
Government Revenue and Price Impact

While the reinstatement of SST involved the government returning RM23 billion in revenue by reducing the number of taxed items compared to the GST regime, this initiative did not lead to a significant market price burden on the public. The reduced inflation rate observed in 2018 under SST suggests that the tax did not exert undue pressure on consumer prices.
Inter-Ministry Cooperation on Supply Chain

To further address potential price manipulation, the Ministry of Finance is collaborating with the Ministry of Domestic Trade and Consumer Affairs. This partnership aims to examine the entire supply chain by combining data on import prices from the Royal Customs Department with nationwide price comparison data held by the Ministry of Domestic Trade and Consumer Affairs. This allows for the identification of potential price exploitation points within the chain.

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How does SST compare to GST on inflation?

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