Firms seeking to profit from GST hike could have actions made public: committee

ERRANT firms which seek to profit from the upcoming goods and services tax (GST) hike may have their actions made public, but businesses who raise prices due to genuine cost pressures will not face action from the authorities.

It would not be acceptable for businesses to use the GST as a reason for raising prices before it is implemented in 2023 and 2024, said the Committee Against Profiteering (CAP) in a statement on Wednesday (Mar 16).

Firms should also not raise their prices by more than the GST increase and cite the hike as the reason for raising prices after it kicks in.

The CAP acknowledged that many businesses are facing cost pressures due to global supply chain disruptions and rising energy costs.

Its chairperson, Minister of State for Trade and Industry Low Yen Ling, stressed that the committee's role is to "strengthen transparency and enable free market competition to function as it should" and is not to add any regulatory burden on businesses.

It urged firms to be transparent with their prices "and not misrepresent the reasons for any price increase as this will mislead consumers".

"Genuine and honest businesses have nothing to worry about," said Low during a media interview on Wednesday.

The CAP reconvened on Wednesday and its members include Singapore Retailers Association (SRA) president R Dhinakaran; Restaurant Association of Singapore president Andrew Kwan; NTUC FairPrice group chief executive officer Seah Kian Peng; non-constituency Member of Parliament Hazel Poa; and Consumers Association of Singapore (Case) president Melvin Yong; among others.

When it last convened in 2007, the CAP had received more than 200 pieces of feedback, 90 per cent of which were related to firms in the food and beverages and retail sectors. One case - involving a student care centre - was made public, though the firm was not named.

The CAP will focus on essential food items commonly consumed by Singapore households, such as eggs; chicken; vegetables; meals from hawker centres and coffee shops; and non-food essentials like household products.

Low said the CAP will be using the Department of Statistics' consumer price index to monitor closely the prices of these essential items.

It will also work with partner agencies and organisations, including the Competition and Consumer Commission of Singapore, the People's Association and Case, when investigating and reviewing feedback from the public.

Low said the CAP will not be assessing firms by a fixed template; each piece of feedback will be reviewed on a case-by-case basis.

"The CAP 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 CAP said. It may then also make public the actions of such errant businesses.

Speaking to reporters on Wednesday, Yong said compared to 2007, consumers can now tap technology - such as Case's Price Kaki app - to help them compare prices at their own convenience. He added that Case plans to expand the app to include more retailers, products and services.

Hong Poh Hin, vice-chairman of the Foochow Coffee Restaurants and Bar Merchants Association and one of the committee members, said: "Business competitors have to contemplate how to continue to attract their customers... the industry also will not hurt its relationship with customers just to make a bit of profit."

"If there is too big of a price disparity with your competitors, then customers will no longer come to you," he added.

Echoing him, SRA's Dhinakaran said its members are responsible and will not "look for these kinds of short-term gains" by seeking to profit from the GST hike.

Members of the public who wish to provide feedback on businesses suspected to be profiteering from the GST hike can do so at the official CAP website from Apr 1.