KUALA LUMPUR (Jan 10): The re-introduction of the sales and service tax (SST) has increased the cost of doing business, says Hai-O Enterprise Bhd managing director Tan Keng Kang.
The government reintroduced the SST on Sept 1, 2018, in place of the goods and services tax (GST), which was zero-rated from June 1 last year.
Speaking at opening ceremony of Menara Hai-O here, Tan said imported products are subject to SST as such goods are not exempted under the indirect tax regime, hence the group's cost is seen to be increased at a range of 3% to 5% since the re-implementation of SST.
"In comparison, the GST is a cost for end consumers, rather than businesses. This was because companies can claim back the input tax paid under the GST and pass the tax burden to the consumers," said Tan.
Despite the group facing higher cost pressure, Tan said Hai-O continues to maintain its selling prices amid soft market sentiments.
Meanwhile, Hai-O plans to implement a new promotion campaign and launch new products to boost sales in the second half of the financial year ending April 30, 2019 (2HFY19), said Tan.
Hai-O's net profit for the second quarter ended Oct 31, 2018 (2QFY19) fell 37% to RM13.6 million, from RM21.44 million a year earlier, on lower sales from its multilevel marketing segment. Its quarterly revenue also fell 25% to RM92.17 million from RM123.53 million a year ago.
At the noon break today, shares of Hai-O were higher by 7 sen or 2.33% at RM3.07, giving it a market RM921.91 million