Government Seeks Lower Tax Rates

This is an article from the Star newspapers which I came across yesterday. One thought immediately comes to mind after having read the article: high income nation + low direct taxes = GST, while “happiness index” = :( for most people!

IPOH: The Government hopes to move Malaysia towards being a nation of high income and low taxes, Finance Minister II Datuk Seri Ahmad Husni Hanadzlah said.

“We have found that since the people are earning more these days, we might as well lower tax rates to reflect this.”

“The initiatives taken in Budget 2013, where some groups were exempted from income tax, show that we are heading towards that direction,” he said at a press conference here yesterday.

Ahmad Husni said that the Government was pursuing the high income and low taxation model in relation to the aspiration of Prime Minister Datuk Seri Najib Tun Razak to improve the country’s “happiness index”.

Najib had said in November that the index was currently at 7.55 on a scale of 10, adding that there was room for improvement.

Ahmad Husni said the government had done research in some countries that used economic models such as high income and high taxation and low income and high taxation.

Based on the research, he said, it was decided the best model to improve the “happiness index” was the high income and low taxation model.

“The performance of the Inland Revenue Board and Customs Department is steadily increasing through higher efficiency in tax collection, meaning higher revenue for the Government.

“The current Economic Transformation Plan (ETP) has encouraged companies to rake in higher corporate revenues and individual income is also rising.

“When the ETP reaches a peak where we can see high income from both sides, we can then look into increasing taxes. Our current focus is reducing taxes,” he said.

Source: The Star Online, Monday February 18, 2013

About Richard

Richard Oon Hock Chye has more than 25 years of experience in taxation and business advice, with particular expertise in Malaysian property law. He began his taxation career with Deloitte Touche Tohmatsu, a ‛Big Four’ accounting firm, before starting his own practice, ConsulNet Tax Services Sdn. Bhd., in 1996. He is currently the National Tax Director of TY Teoh International, one of the leading consulting service providers in Malaysia. It is a member of the MSI Global Alliance, a global network of more than 250 independent legal and accounting firms, in over 100 countries. Richard sits on the board of two companies listed on the Main Board of Bursa Malaysia, as an independent non-executive director. He is also a regular contributor to several magazines and publications, and has shared his tax expertise on numerous occasions with organisations and property developers. As well as being a member of the Malaysian Institute of Accountants (MIA), Richard is a fellow member of both the Association of Chartered Certified Accountants (ACCA) and the Chartered Tax Institute of Malaysia (CTIM). He is a Certified Financial Planner (CFP) and holds a tax agent licence issued by the Ministry of Finance. Richard is also the author of the book, ‘Every Property Investor’s Guide To How To Pay Less Tax Legally’.

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