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