Basic goods still expensive because of fuel tax, reveals PKR

PKR deputy president Rafizi Ramli said goods were not becoming cheaper despite the lower fuel prices due to businesses having to buy taxed fuel. – The Malaysian Insider pic, January 22, 2015.Consumer goods are not becoming cheaper with lower fuel prices because industries and commercial entities have to buy taxed diesel, RON95 and RON97 from petrol companies, says a PKR lawmaker.

The PKR vice-president said that a recent circular from the Finance Ministry leaked to him by an unidentified source revealed that it was Prime Minister Datuk Seri Najib Razak who made fuel more expensive for industrial and commercial consumers.

He said, according to the circular, a sales tax has been imposed on petrol and diesel for industries and commercial entities, which use fuel in large quantities for their businesses, beginning January 1 this year.

"The tax is imposed on the prices is set by the government, which is the price paid by the public.

"The tax is 40 sen a litre for diesel and B5 diesel, and 58.62 sen a litre for RON95 and RON97," he said in a statement today.

Rafizi said the industries and commercial consumers were also not allowed to buy fuel from petrol stations like the common consumers, but had to go directly to petrol companies like Petronas, Shell, Petron and others to buy the sales-tax imposed fuel in bulk.

He said that it was a fact that many were unaware of.

"I had been asked frequently, especially by Umno supporters, why the prices of goods have not come down when the prices of petrol were down. These questions follow a quiet campaign on online social sites that Chinese businessmen are refusing to lower their prices.

"I confirm that petrol and diesel for industrial and commercial users have gone up because of Najib... the circular was sent to me last week,” he said.

"I promised my source that I won't show the circular, but the reference number for the document should be enough for the media to ask the Finance Ministry," he said, revealing the reference number “Pekeliling Perbendaharaan SR(8.09)102/21-1Vol.58(38)”.

According to the circular, the ministry would also issue a monthly notice to inform the industries and businesses of the sales tax discounts.

For January, the discounts are 9.4 sen per litre for diesel, 22.72 sen per litre for RON95, 6.08 sen per litre for RON97, and 12.89 sen per litre for B5 diesel.

This means the sales tax imposed after the discounts is 30.6 sen per litre for diesel, 5.9 sen per litre for RON95, 52.54sen per litre for RON97, and 27.11 sen per litre for B5 diesel this month.

Rafizi said because of the sales tax, manufacturers and those in the logistics business, which were all categorised as industry and commercial entities, were not enjoying the lower fuel prices now and were instead paying more.

"They are paying RM2.269 per litre for RON95, and RM2.236 per litre for diesel, compared with the normal prices of RM1.91 and RM1.93 per litre.

"This means they are subjected to two forms of taxes by the government, which is the sales tax announced by the monthly circulars, as well as the hidden petrol/diesel tax due to the notable difference between the market prices and the prices set by the government," he said.

Rafizi accused Najib's administration of being irresponsible by imposing tax quietly on the industries to generate more revenue while hoping that the people would redirect their anger from the government to the business community.

He said the government continued to collect hundreds of millions in taxes from the people and the businesses each month since the fall in fuel prices.

"To be fair to everyone, all forms of taxes on the people and the businesses should be halted immediately so the drop in fuel prices can be translated into the decrease in cost at all levels of the value chain, from manufacturer to consumer," Rafizi added.

- TMI