Govt must clar­ify new taxes and their struc­ture

New Straits Times - - LETTERS - LOH SOO FOO Kuala Lumpur

the new taxes to be in­tro­duced will be specif­i­cally for a tar­get group and re­flect an in­come de­rived from a busi­ness ven­ture, for ex­am­ple, profit in­stead of con­sump­tion-based ap­proach.

We have been strug­gling with the ris­ing cost of liv­ing since the im­ple­men­ta­tion of the Goods and Ser­vices Tax in 2014 and hope the new taxes will not im­pact us greatly.

The govern­ment should re­con­sider the busi­ness model and eco­nomic struc­ture be­fore in­tro­duc­ing new taxes.

I’ve ob­served that Malaysia is mov­ing to­wards, among oth­ers:

sales ei­ther through Face­book and other so­cial me­dia plat­forms or apps. Surely, in the long term, this will dampen sales of re­tail out­lets and af­fect the em­ploy­ment rate. Hence, the govern­ment should in­tro­duce dig­i­tal tax on sales made through so­cial me­dia plat­forms;

and en­vi­ron­ment tax. I think ap­ply­ing a stan­dard cor­po­rate tax rate is not re­flec­tive. Tax is im­posed as a re­sult of profit but it should re­flect the im­pact it has on the busi­ness and econ­omy. For ex­am­ple, let’s say the plas­tic in­dus­tries em­ploy 10 work­ers and gen­er­ate a profit of RM500,000 per an­num, but the neg­a­tive so­cial im­pact it cre­ates to the en­vi­ron­ment, such as wastage and health is­sues, are not jus­ti­fi­able by merely pay­ing a 20 per cent tax;

wealth tax — those own­ing more than 10 prop­er­ties or have a net worth of at least RM10 mil­lion should be sub­jected to “su­per wealth tax”.

In­come tax rate is de­rived based on em­ploy­ment in­come and not pas­sive in­come;

strongly against, and spec­u­late that the Fi­nance Min­istry will never im­pose cap­i­tal gains tax on shares trad­ing. This is be­cause shares trad­ing cov­ers a wider scope and some­times in­volves re­tirees and pen­sion­ers who trade in small vol­ume through remisiers.

At this mo­ment, Malaysia is not ready for cap­i­tal gains tax; and

bank­ing in­dus­try makes bil­lions and is mov­ing to­wards on­line trans­ac­tions.

Mean­ing, the real im­pact on em­ploy­ment is no longer great, where they are not em­ploy­ing a size­able work force, but tal­ented peo­ple or those with skills.

Also, bank­ing sec­tors are en­joy­ing sig­nif­i­cant in­crease in the non-in­ter­est in­come seg­ment which do not re­flect risk and re­ward taken.

Net profit should re­flect risk and re­ward taken by an en­tre­pre­neur. How­ever, non-in­ter­est in­come re­flects ser­vices un­der­taken by the bank in ex­change for money. Hence, bank­ing sec­tors should pay a higher cor­po­rate tax on non-in­ter­est in­come.

The govern­ment should clar­ify what the new taxes are and their struc­ture and get feed­back from the peo­ple.

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