THE VIEW OF MANIPULATED PRICE TAGS

By Jeeva Raj & Maisarah Ahmad

Consumers are often been tricked by retailers by the usage of 99 cents in the price tag.
Consumers thought that they are paying less but actually the fact is, they had to pay extra one
cent as the government has introduced a Rounding Mechanism to the nearest multiple of 5
cent for over-the-counter payments since 1 April 2008. The rounding mechanism is a total
amount of a bill (including goods and services subject to tax) that ends in 1, 2, 6 and 7 cent to
be rounded downwards and 3, 4, 8 and 9 cent to be rounded upwards to the nearest multiple
of 5 cent.
Although the usage of one cents are not used in the daily sales activity on our country but yet
price tag often pictures this value at the end of the figure which is still allowed by our
government. This issue have been a burden for daily consumers and still an unfigured out
problem by government which increases from time to time. Although the implementation of
6% Goods and Services Tax (GST) in our country is helpful for the countrys economy and
structural development yet the citizens of our nation still suffers as they have to pay extra
money either in buying goods or utilising the services that are available. For example, when
the price for good is RM1.00, the price will increase up to RM1.06 when GST is applied.
Moreover, with the rounding mechanism to the nearest multiple of 5 cents, the actual paid
price for the good is RM1.10. This shows a huge difference from the actual price which have
been a least concern among our citizens where they make an assumption that the 4 cents that
they are paying extra is just a small sum.
However, this whole situation is somehow acts as a beneficial scenario to our nation,
not only to the retailer nor government. When the retailer makes more profits, they have to
pay higher tax to the government and this will increase the governments income. As the
governments income rises, government are able to increase the fund in the countrys annual
budget. For example, this fund eventually increases the facilities which are provided in
education institutes like providing all the ICT equipments that are needed in this modern
world which are widely used by students and teachers in the process of teaching and learning
as we are going along to realize the Vision 2020 which is initiated by our former Prime
Minister, Tun Dr Mahathir Mohamad, well known as Malaysias Father of Modernization.
Besides that, this eventually rises the level of education of our country among the countries
which are well developed than our country.
On the other hand, as this process increases day by day, the economical state of our
country will be at a stable level compared to other developed countries. When the economy
of the country increases it is easier for the government to make more developments especially
in the rural areas so that there is no huge gap in between rural and urban citizens. The rise of
economy will increase the value of our currency as to compared to other world currencies and
in future these actions will be resulting in an improvement of our standard of living in
Malaysia where we will be able to live the same life as the people of developed countries and
humbly sit at the same height as the other developed countries in todays world.
In a nutshell, we actually cannot assume that the price rounding mechanism actually
used as a marketing strategy by the retailer. We must deny the mindset that when we spend
more, the retailers will earn more profits and it is only beneficial on behalf of their side. If we
have highly intellectual government then the income which the government earned by the tax
that is charged on the retailers gross profit which will be converted into something that is

beneficial for the nation as the people of this country get to enjoy more facilities and also
higher quality of living. We have to be an optimist even though we feel that this whole
situation we are facing now is a burden for us. Lets have a positive thought that the
government have their own strategies in order to improve the nation.