Breakthroughs from tax policy

SGGP October 15, 2023 07:00

According to Nikkei Asia, Malaysian Prime Minister and Finance Minister Anwar Ibrahim has presented the 2024 budget draft (over US$83 billion) to Parliament, outlining bold economic reforms with new tax measures.

Mr. Anwar stated that this budget plan has three main focuses: good governance to ensure the flexibility of services; restructuring the economy ; and improving people's living standards. The government will support people in reducing living costs through the allocation of subsidies for food, fuel, and other essential needs.

Malaysia also aims to increase revenue without burdening the people by imposing high taxes on luxury goods, raising the sales and services tax from the current 6% to 8%, excluding food, beverages, and telecommunications. According to the Malaysian Prime Minister , this aligns with Malaysia's plan to build a new economic framework, known as the Madani economy, aimed at improving the lives of its citizens.

The Madani Economy, announced by Prime Minister Anwar at the end of July, is a comprehensive initiative aimed at helping Malaysia address its current economic challenges. The initiative sets out seven goals for the next 10 years, including: placing Malaysia among the top 30 largest economies in the world; ranking among the top 12 countries in the Global Competitiveness Index; ranking among the top 25 countries in the Human Development Index; and ranking among the top 25 countries in the Corruption Perception Index…

However, The Straits Times quoted several experts as saying that these new tax measures will only be a stepping stone, not a real game-changer impacting Malaysia's treasury (tax revenue is projected to increase modestly by only 1.5% in 2024).

Wan Suhaimie Saidie, Director of Economic Research at Kenanga Investment Bank (Malaysia), commented: "The Malaysian government is employing a tax strategy. It hasn't yielded as much results as expected, but it can be expanded in stages. I believe the government is being cautious, not wanting to burden the middle class too early."

Source: https://www.sggp.org.vn/dot-pha-tu-chinh-sach-thue-post709844.html