MALAYSIA'S ANWAR REGIME TURNS 'TAX-HUNGRY' - VAT TO BE IMPLEMENTED AT 5 TO 10% WITH OTHER TAX MEASURES ALSO POSSIBLE TO REPLENISH FAST-DEPLETING GOVT COFFERS
Written by Stan Lee, Politics Now!
KUALA LUMPUR (Politics Now!) - Malaysia will be introducing value-added taxes (VAT) of between five to 10 per cent, with "other tax measures" also on the way.
Finance Minister II Amir Hamzah did not give further details of the VAT coming into force but denied rumors of a plan to reintroduce the Goods and Services Tax (GST).
Inflation-hit Malaysians have been struggling to make ends meet and news of more taxes, whether progressive or broad-based, is unlikely to go down well.
Ironically, this appears to be the opposite to the reaction from within embattled Prime Minister Anwar Ibrahim's government and PKR party - who seem to be anxious for more tax measures to replenish the country's fast-depleting public coffers.
"This tax (VAT) is progressive because it is imposed on those who can afford to purchase high-value goods and does not burden low-income groups," Amir assured Parliament on Tuesday (Mar 5).
Amir had been responding to a question from coalition mate Rodziah Ismail, the PKR MP for Ampang, who had quizzed him on the government's readiness to introduce more tax alternatives to increase revenue and address deficits.
"The government is committed to strengthening the country's financial position to support the development agenda and the welfare of the people," said Amir.
"We are also open to considering other tax measures that can increase revenue without causing long-term effects."
REAL-LIFE INFLATION AT LEAST TWICE THE GOVT'S OVER SANGUINE 2.5%?
According to Amir, the VAT rate to be applied will be based on specific threshold values for each commodity.
He admitted that the actual on the ground inflation rate for food and beverages was 5% - at least twice the government's projected average of 2.5% in 2023.
“It (GST) is a form of broad-based consumption tax and therefore, it isn’t a suitable time to reintroduce it, as Malaysians, especially those with low-income, are facing cost of living challenges,” said Amir.
NO GST BUT EXPLORING NEW TAX MEASURES
Amir also assured the government would intensify efforts to address leakages in tax collection.
"In addition to exploring new tax measures, efforts would be redoubled to tackle revenue collection leakages and ensure that those who are supposed to pay taxes fulfil their responsibility."
He added that the government has implemented various measures to boost national income, notably through tax reforms.
This includes the capital gains tax on the disposal of unlisted shares, effective from March 1.
"In alignment with international tax standards and principles of social equity, taxes are also applied to the sale of capital assets as an additional revenue stream for the government, complementing corporate income tax," said Amir.
"However, it's important to note that this tax is not applicable to individuals disposing of unlisted shares."
Written by Stan Lee, Politics Now!
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