KUALA LUMPUR (June 5): Malaysian Retailers Association (MRA) has urged the government to set the rate for the upcoming sales and services tax (SST) at less than 6% to support the retail price of goods, according to its newly-appointed president James Loke.

"We also asked about the SST. We hope the SST will not be high, as it will increase the selling price," Loke told reporters after meeting the five-man Council of Eminent Persons (CEP) here today.

"We leave it to the wisdom of the Council to come out with a good SST rate. Of course we want the rate to be as low as possible. For us, less than 6% is good, and anything more will have an impact on retail prices," Loke added.

Shortly after assuming power, Prime Minister Tun Dr Mahathir Mohamad zero-rated the highly unpopular goods and services tax (GST) from the start of June. The consumption tax will be replaced by the SST effective September.

Previously, the rate of the SST was set at 10%.

Meanwhile, Loke said MRA also shared with the CEP, an advisory body appointed by the government to assess the current state of the economy, on the oversupply of retail malls, as well as the taxing of goods sold online.

"Also online sales is posing a threat and challenges to retailers as there is not much tax control on such items. We have shared with the council on [our proposed] way to resolve this matter," he added.

This year, Loke said MRA hopes spending in the retail industry will grow 5% to 6%, in line with the country's annual economic growth.

"In the first quarter of this year, retail spending grew 3.2%. In the second quarter, we have two important events: the 14th general election and the Hari Raya season, which should boost retail spending," Loke added.