Government to ‘scam’ Malaysians with taxes

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Government to ‘scam’ Malaysians with taxes

KUALA LUMPUR, Oct 6, 2024: Only an uncaring and cruel government will resort to implementation of multiple taxes to raise its revenue.

And the Madani Unity Government (UG) is reported to be planning to do just that in Budget 2025.

Aren’t Malaysians paying enough taxes? And how much taxes are the super rich - like Dr Mahathir Mohamad, Daim Zainuddin and the disgraced former prime minister and jailbird Najib “1MDB” Razak's families - paying?

No News Is Bad News reproduces below two news repoorts on the government’s plans to “scam” Malaysians with taxes next year:

Inheritance tax will burden middle-class families, says think tank

FMT Reporters

-06 Oct 2024, 07:25 PM

Insap says small and medium enterprises, many of which are family-run, would have to bear an unnecessary financial burden.

Family-run businesses and middle-class families would be worse affected by the proposed reintroduction of inheritance tax, said Insap.

PETALING JAYA: A think tank has objected to a proposed reintroduction of the inheritance tax in the 2025 Budget among other measures to increase federal government revenue.

The inheritance tax would be counterproductive in making up the shortfall in government revenues, said the Institute of Strategic Analysis and Policy Research (Insap).

 Pamela Yong

Insap chairman Pamela Yong said in a statement that middle-class families and small business owners would be worse affected by the reintroduction of the tax, which was abolished in 1991.

Many small and medium-sized enterprises which are family-run would face an unnecessary financial burden, which could stifle entrepreneurship and discourage wealth creation of the middle- class. by

Yong was commenting on a Utusan Malaysia report which suggested that the new federal budget would impose five new taxes: the inheritance tax, an unhealthy food tax, carbon pricing tax, high-value goods tax, and artificial intelligence (AI) tax.

She said feedback from the various grassroots showed that goods and services tax is still regarded as a better tax system compared to sales and service tax, as it has a broader and more efficient tax base.

Malaysia

Government expected to introduce 5 new taxes in Budget 2025

The taxes are unhealthy food tax, carbon pricing tax, inheritance tax, high-value goods tax (HVGT), and Artificial Intelligence (AI) tax.

Updated 2 hours ago · Published on 06 Oct 2024 4:18PM

 

Economic analysts predict that the unhealthy food tax will be introduced to address the increase in obesity rates and lifestyle-related diseases.- October 6, 2024

THE government is expected to introduce five new taxes in Budget 2025 to promote healthier lifestyles, support sustainable living, and address economic inequality.

According to reports in Utusan Malaysia, the taxes are unhealthy food tax, carbon pricing tax, inheritance tax, high-value goods tax (HVGT), and Artificial Intelligence (AI) tax.

Economic analysts predict that the unhealthy food tax will be introduced to address the increase in obesity rates and lifestyle-related diseases.

The National Health and Morbidity Survey (NHMS) 2023 report revealed that 54.4 per cent of Malaysians are overweight.

The Carbon Pricing Tax is to support the country's economic agenda and efforts to deal with climate change in line with the goal of zero carbon in 2050.

Meanwhile, the introduction of Inheritance Tax to prevent the accumulation of unproductive wealth in a family thus helping to reduce the wealth gap.

High-Value Goods Tax (HVGT) enables the government to collect revenue from high-income earners who can afford luxury goods, thereby reducing the gap between the rich and the poor.

The Artificial Intelligence (AI) tax is to drive the growth of the high-tech industry to support the country's economic development.

Analysts are also of the opinion that, based on the current economic situation, the government will continue to commit to implementing a more progressive tax system including expanding the use of e-invoicing which has the potential to increase revenue collection.

Senior Lecturer of the Faculty of General Studies and Advanced Education of Sultan Zainal Abidin University (UniSZA), Dr Farah Roslan said the introduction of the unhealthy food tax complements the implementation of the existing sugar tax to address the increase in obesity rates and diseases related to unhealthy lifestyles.

"The revenue from these two taxes can be utilised by subsidising healthy foods such as fruits and vegetables as well as implementing nutrition education programs in schools and communities," he told Utusan Malaysia.

Dr. Farah said that several countries have succeeded in proving the effectiveness of Fat Tax implementation including Hungary which introduced a public health tax in 2011 on food with high sugar, salt and fat content with a tax rate of between four and 10 percent depending on the product.

Meanwhile, a Lecturer at the Faculty of Economics and Management (FEP), Universiti Kebangsaan Malaysia (UKM), Prof. Associate Dr. Mustazar Mansur said carbon tax is implemented by charging a direct fee on carbon emissions based on the carbon content of fossil fuels. 

"As of 2023, there are 75 carbon pricing methods that have been successfully implemented around the world in reducing carbon emissions to increase the country's revenue for green investment," he said. - October 5, 2024