Same tax rate, different rises
By Beck Vass
4:00 AM Saturday Jun 26, 2010

It should be simple. When GST increases from 12.5 per cent to 15 per cent in October, everything we buy should go up by the same percentage. Right?

Not necessarily, say retailers and other pricing experts contacted by the Weekend Herald.

We're more likely to see a range of price changes, partly because retailers sell products based on different price points to make things seem cheaper to customers.

An item priced at $9.99, for example, is unlikely to rise by 2.5 per cent to become $10.21, because it will look more expensive once it is over the $10 mark.

The retailer may make the item $10.90, taking advantage of the GST increase to grab some extra profit. Or, they may absorb the cost and increase another product's price instead.

More here.