It is good that the Inland Revenue Authority of Singapore (Iras) said the Committee Against Profiteering (CAP) takes a serious view of any unjustified price increase that uses the goods and services tax (GST) rise as an excuse, and will investigate all feedback on such cases (Businesses using GST hike as cover for price increases will be investigated: Iras, Dec 23).

However, against the backdrop of rising inflation, consumers have great difficulty discerning whether businesses are legitimately increasing prices due to increased costs or are using the GST rise as an excuse.

Consumers may also have no way of knowing whether the quantum of price increase is legitimately proportional to the increase in costs. 

Should consumers err on the side of caution and report every business whose price increase they feel is unreasonable or excessive? That is impractical and onerous, given that numerous businesses are increasing their prices.

Can Iras and the CAP come up with other effective ways of catching businesses that are using the GST hike as a cover to increase prices?

Perhaps Iras and the CAP could audit businesses directly (and not wait until consumers report them), require businesses to explain price increases and then assess whether the changes are reasonable. Iras and the CAP could also mandate certain limits on price increases.

Iras and the CAP should give consumers clear guidance on how to discern when we should report a business which increases prices, and when to accept that it is a legitimate reflection of economic conditions.

Wesley Loh