GST must include tax overhaul, MCA tells Najib…..But how to raise income immediately?!

2:37PM May 19, 2014(MKini)

The implementation of the Goods and Services Tax (GST) must come with an overhaul of the entire income tax system to limit the burden of the poor, said MCA.MCA’s deputy chairperson of strategic planning and research committee Lua Choon Han in a statement called on Prime Minister Najib Abdul Razak to implement a “holistic tax reform blueprint”.This includes reducing corporate and personal income taxes, plus tax incentives for the small and medium-sized enterprises (SME).

This way, the government does not just burden the people with GST but also spur income growth and spending, said Lua.

“It is also imperative that the government also looks into a method to increase the general income of households because according to the Ministry of Finance, 80 percent of Malaysian households or 5.2 million families receive BR1M (Bantuan Rakyat1Malaysia).

“This indicates a high number of households are in the lower income bracket,” Lua said in a press statement.

Lua said since the GST is about making Malaysia’s economy competitive, then it should also follow Singapore’s example.

“A simple comparison with Singapore would show that the island state’s GST is only one percent higher than Malaysia’s proposed six percent GST rate.

“Yet Singapore’s personal and corporate tax rate is 20 percent and 17 percent respectively – a difference of 6 – 8 percent lower rate than Malaysia’s and this will influence Malaysia’s global attractiveness and competitiveness,” he said.

Citing further comparisons with other countries, the World Bank Doing Business Report ranks Malaysia at 36 with total tax rate of 36.3 percent in profit, behind South Korea (25), New Zealand (23), Brunei Darussalam (20), United Kingdom (14), Singapore (5), and Hong Kong (5), he said.

Lua’s suggested tax reforms include:

  • At least 3% reduction in corporate and personal income tax
  • Expansion of the tax range and tax bracket where the highest bracket should be widened, which will relief the burden of middle income groups especially in urban areas.
  • Furthermore, a person who earns RM100,000 per annum should not be taxed at the same high rate of 26 percent with a person who earns RM500,000 per annum.
  • A new mechanism or tax system to spur the growth of SMEs (including home-based businesses) that at present contribute 32.7 percent of the country’s GDP.

One thought on “GST must include tax overhaul, MCA tells Najib…..But how to raise income immediately?!

  1. This GST(Goon Survival Tax) as the name suggests is introduced for the goons in Umno to survive. Especially when the country is now in deficit and that is the only tax that will keep the goons in Umno alive and more importantly is to ensure that all the goons in Umno especially those in the cabinet, to have a source to keep enriching themselves.
    Above all there will be sufficient funds around for them to pay all the inflated bills.One thing to remember when the black gold has run out something else or should I say a new form of tax will be introduced or the rate of 6% will be increased. Mark my words this will happen soon, as soon as the black gold runs out because there is no nothing else left only the people left to carry this antibiotic.
    Therefore the GST (Goons Survival Tax) is really for Najib to continue buying things like the submarine or leasing and buying a jet for him and his wife to fly around. Above all is for him and all the goons in the cabinet to continue enriching themselves plus also to keep all their cronies in the name of contractors, they have unilaterally appointed to get their inflated bills very promptly paid. It is one sure way for Malaysia to go bankrupt !

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