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Anti-profiteering committee admits 'complex' task ahead of GST hike, as firms grapple with rising costs

SINGAPORE — The chairman of a committee that aims to ensure that businesses do not use the impending Goods and Services Tax (GST) hike as an excuse for unjustified price rises said on Wednesday (March 16) that it faces a more "complex" task this time round, compared with when it was last convened in 2007.

 

Members of the public may report through the Committee Against Profiteering's website if they come across businesses suspected of profiteering by using the Goods and Services Tax hike as an excuse to raise prices.
Members of the public may report through the Committee Against Profiteering's website if they come across businesses suspected of profiteering by using the Goods and Services Tax hike as an excuse to raise prices.
  • The Committee Against Profiteering was reconvened on March 16 ahead of the GST hike
  • It aims to investigate public concerns that businesses are using the GST as an excuse for unjustified price rises
  • The committee's chairman said its work will be made more complex given that businesses are also facing inflationary pressures
  • The committee was first set up in 1994 with the introduction of the GST
  • It was reconvened during previous rounds of GST increases in 2003 and 2007

SINGAPORE — The chairman of a committee that aims to ensure that businesses do not use the impending Goods and Services Tax (GST) hike as an excuse for unjustified price rises said on Wednesday (March 16) that it faces a more "complex" task this time round, compared with when it was last convened in 2007.

Ms Low Yen Ling, Minister of State for Trade and Industry who chairs the Committee Against Profiteering, said that this is due to inflationary pressures that businesses now face that could become conflated with GST price hikes.

However, another member of the committee noted that technology and digitalisation has progressed since 2007, which would make it easier to determine how essential items should be priced. 

The committee reconvened on Wednesday and from April 1, members of the public may report through the committee's website if they come across businesses suspected of profiteering by using the GST hike as an excuse to raise prices.

The rate of GST will increase to 8 per cent from Jan 1, 2023 and to 9 per cent a year later.

The committee will investigate and, in serious cases, may make public the names of the businesses. 

The committee comprises Members of Parliament and representatives from industry and grassroots organisations.

Other representatives include those from the Singapore Retailers Association, Foochow Coffee Restaurants and Bar Merchants Association, the Consumers Association of Singapore (Case) and the Singapore Business Federation.

The Committee Against Profiteering was reconvened on March 16, 2022 ahead of the Goods and Services Tax hike.

Speaking to the media after the committee’s first meeting on Wednesday, Ms Low said that the committee will "keep a very close watch on the prices of essential goods and services, as well as groceries (and) daily necessities".

She added that the work of the committee will be made more complex compared to when it last convened in 2007, due to the inflationary pressures that businesses and consumers now face. In 2007, the GST was raised from 5 per cent to its current level of 7 per cent.

Some (businesses) may conflate the business-cost-related price increase with GST-related hikes. The committee will follow up on the (public) feedback very carefully, and very, very closely.
Ms Low Yen Ling, Minister of State for Trade and Industry who chairs the Committee Against Profiteering

“Some may conflate the business-cost-related price increase with GST-related hikes,” she said. “The committee will follow up on the (public) feedback very carefully, and very, very closely.”

Ms Low added that the committee will work closely with bodies such as the Competition and Consumer Commission of Singapore and the People’s Association to tap "their local knowledge and the ground relations to review and follow up on profiteering feedback and resolve them amicably”. 

The committee was first set up in 1994 with the introduction of the GST. It was then reconvened during previous rounds of GST increases in 2003 and 2007.

In a statement, the committee said on Wednesday that it will engage businesses to “find out the reasons for a price increase and evaluate the explanations provided, to determine if it constitutes profiteering on the GST increase”. 

“The (committee) may make public errant businesses that seek to profiteer on the pretext of the rise in GST,” it added. 

Ms Low said that in 2007, when the committee last met, one student-care centre was sent a public letter by the committee.

The centre had communicated to its customers that its fees would be increasing by a certain percentage because of the GST. The centre, however, was never publicly named by the committee then, nor was its name revealed on Wednesday. 

The student-care centre was one out of the 200 businesses that were reported over a period of two years, of which 90 per cent of them were food-and-beverage and retail businesses. 

“In many of the cases, the merchants agreed to explain why it was necessary for them to make the price adjustments,” Ms Low said. “And in some cases, the merchant and the hawkers deferred the price increase.”

Inflationary pressures pose a challenge to the committee, but technology and digitalisation will help make the task easier.

Mr Melvin Yong, president of Case and a member of the committee, said: "Back in 2007, I understand that Case had to do regular surveys on the prices of daily essentials and then work with the media to publish... these findings." 

He added that presently, there is crowdsourcing technology such as the Price Kaki application, where consumers may "easily access prices of more than 4,000 items on the app". 

The crowdsourcing mobile application was launched by Case in 2020 so that consumers may better compare the prices of the goods they buy. 

HOW THE PROCESS WORKS

After a member of public submits feedback on the Committee Against Profiteering's website, the committee will engage the business to find out the reasons for the price increase and evaluate the explanations provided, to determine if business is profiteering on the GST increase. 

If the business is not profiteering by using the GST as a pretext for the rise but faces higher operating costs in general, then no action will be taken. 

If the business is found to be profiteering off the GST increase, it will be given the opportunity to explain their price increase to the committee, and in serious cases, the committee may make public the identity of the business. 

The committee added in its statement that its members “acknowledge the pressures businesses are facing amid global supply chain interruptions and energy cost concerns, among others, but note that most businesses are transparent in their pricing”. 

The members also urge businesses to be transparent with their prices, and not misrepresent the reasons for any price increase because this will mislead consumers. 

“The committee reiterated that it is not acceptable for businesses to use the GST increase as the reason for raising prices before the implementation, nor is it acceptable for a business to raise prices by more than the GST increase after the implementation, citing the GST as the reason.”

For members of public who wish to report a business suspected of raising prices because of the GST hike, they should include details of the business as well as the specific product and price increase.

"All feedback submitted through the website will be reviewed and further investigated if necessary,” the committee said. 

Public feedback should be directed to the Committee Against Profiteering's website at www.cap.gov.sg from April 1.

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