SINGAPORE - A committee has been reconvened to address concerns that businesses could use the Goods and Services Tax (GST) as a cover to raise prices.

The 13-member Committee Against Profiteering (CAP) will look into feedback on unjustified price increases of essential products and services, and focus on daily items commonly consumed or used by Singaporean households, such as eggs and chicken.

Chaired by Minister of State for Trade and Industry Low Yen Ling, the committee held its first meeting on Wednesday (March 16). Its other members include representatives from different industries, grassroots organisations and MPs.

"The CAP will keep a very close watch on the prices of our essential goods and services, daily necessities and groceries," Ms Low told reporters after the meeting.

The committee will review and investigate feedback on unjustified price increases that use GST as a reason, and may make public errant businesses that seek to profiteer on the pretext of the GST increase, she added.

Finance Minister Lawrence Wong had announced that the committee would be formed during his Budget speech in February, when he set out how Singapore's GST rate will increase from 7 per cent to 9 per cent in two stages - by one percentage point each time on Jan 1, 2023, and Jan 1, 2024.

The committee was first set up in 1994, the year GST was first introduced, and reconvened during previous rounds of GST increases in 2003 and 2007.

Like before, the reconvened committee will guard against profiteering on essential food items, such as eggs, chicken and vegetables, and meals from hawker centres and coffee shops, as well as non-food essentials like household products.

Ms Low said that the reason why the committee is set up about nine months before the GST hike is to assure members of the public that "we will take a whole-of-government approach, in fact, take a whole-of-society approach to look into egregious cases, unjustified price increase using the GST increase as a reason and that is a very important signal".

At the same time, she noted that “we are in a very complex situation compared with 2007”, as businesses are facing cost pressures, and some sectors are facing more severe pressure than other sectors due to the nature of their sector.

Ms Low said that the Ministry of Trade and Industry “will spare no efforts to support those sectors and the companies, whether it is retail or food and beverages”, citing the support rolled out in Budget 2022 such as the $70 million Food Services and Retail Business Revitalisation Package and the Small Business Recovery Grant. 

"With the help of businesses and members of the public, we will be able to uphold healthy market competition for the benefit of the market and society," she added.

On how the committee is going to decide the perimeters of whether a business is justified in raising its prices, Ms Low said: "In general, our businesses are honest and transparent in their pricing and they should continue to do so."

CAP's role is to strengthen transparency in pricing to enable free market competition to function as it should, she added.

"So genuine and honest businesses have nothing to worry about," she said.

Asked how the essential items will be chosen, Ms Low noted that the Singapore Department of Statistics compiles the Consumer Price Index based on a basket of goods and services.

"So we are using that mechanism to monitor closely the prices of our essential goods and services, groceries and daily necessities," she said.

Ms Low noted that the committee received about 200 pieces of feedback from the public between 2007 and 2009. About 90 per cent of them were related to the food and beverage and retail sectors.

Back then, CAP would work with partners like the People's Association (PA) and the Consumers Association of Singapore (Case) to look into public feedback about price hikes, she noted.

"In many of the cases, the merchants actually agreed to explain why it's necessary for them to make the price adjustment and in some cases, the merchants and the hawkers actually deferred the price increase," she added.

Out of the 200 feedback, Ms Low said the CAP made public one case. In 2007, a student care centre had been reprimanded for excessive fee increase.

The centre, which was not named, had announced to parents in its newsletter that due to the GST hike from 5 per cent to 7 per cent, it would be raising its fees from $270 to $280 across its branches. The $10 difference was nearly twice the additional amount of $5.40 that parents had to pay for the GST hike.

On whether there is a timeframe for the CAP to take action or conduct further investigations after a feedback has been filed, Ms Low said it could vary "depending on the feedback".

Some members of the committee said they are glad to be part of the CAP and to keep a lookout for consumers' interest.

Mr Hong Poh Hin, vice-chairman of the Foochow Coffee Restaurant and Bar Merchants Association which represents more than 400 coffee shops, said businesses can adjust their prices.

"But when they adjust their prices, they must be transparent. It can't be that because the GST goes up by 1 per cent, then they increase their prices by a lot," said Mr Hong.

Meanwhile, Radin Mas MP and Case president Melvin Yong said Case is happy to support the national effort to address consumers' concerns of profiteering and unjustified price increases under the cover of GST.

"We are mindful that some businesses may take this opportunity to raise prices without justification. We must therefore send a strong signal that profiteering and unjustified price increases disguised under the pretext of GST cannot be tolerated," he said.

Singapore Retailers Association president R. Dhinakaran said that educating businesses on CAP's role will be done as this can help prevent profiteering.

In this way, firms "will not do any of the profiteering because of the GST because they know the GST is tax neutral, that means what they collect from the consumers, they will have to pay to Iras (Inland Revenue Authority of Singapore)", he said.

Consumers told The Straits Times that they welcomed the reconvening of the committee to ensure that their interests are taken care of.

Administrative manager Siti Ali, 40, said Singaporeans have to carry the impact when the GST hike takes place in the next two years.

"By having this committee, they will help in becoming like a gatekeeper to strike a balance between understanding the needs of consumers and businesses," she said.

Members of the public who wish to report unjustified price hikes using the GST increase as an excuse can do so at this website from April 1. They can also do so through a hotline or at the community clubs.

The Committee Against Profiteering consists of:

• Ms Low Yen Ling, Minister of State for Trade and Industry
• Mr R. Dhinakaran, president of the Singapore Retailers Association and former Nominated Member of Parliament
• Mr Hong Poh Hin, vice-chairman of the Foochow Coffee Restaurant and Bar Merchants Association
• Mr Andrew Kwan, president of the Restaurant Association of Singapore
• Mr Lam Yi Young, CEO of the Singapore Business Federation
• Mr Lim Hock Chee, CEO of the Sheng Siong Group
• Mr Loh Wee Lee, CEO of Lazada Singapore
• Ms Hazel Poa, Non-Constituency Member of Parliament
• Mr Seah Kian Peng, group CEO of FairPrice Group and an MP for Marine Parade GRC
• Madam Amatul Jameel Suhani, chairman of the People's Association Malay Activity Executive Committees Council
• Mr David Tan, president of the Singapore Food Manufacturers' Association
• Mr Yeo Hiang Meng, president of the Federation of Merchants' Associations, Singapore
• Mr Melvin Yong, MP for Radin Mas and president of the Consumers Association of Singapore