Taxes, governments, people and economic growth

Rumours never stop. Do they usually come true or turn out to be false? Anyway, without spark, there’s no fire. Of course, we do have fire extinguishers too which can take out the fire fast. This is the Article in FreeMalaysiaToday: Investors brace for tax on capital gains, consumers  It quoted Geoffrey Ng, a director of Fortress Capital Asset Management Sdn who said by phone.“Taxes will definitely be introduced especially on the rich and on consumption. He also said, Capital gains tax is “definitely a widespread worry among investors”, but it is unlikely as most markets in Southeast Asia do not have such taxes.” (MOST markets in ASEAN does not have it is indeed a very strong reason because if we lose the investors, they can still continue to invest into ASEAN through other countries)

That two potential taxes swirling in the market would be capital gains and consumption taxes. Our Finance Minister Lim Guan Eng will be revealing more in his 2019 budget speech. The article said that Malaysia is now seeking new sources of income since removing GST as well as the debt and liabilities exceeding RM1 trillion (US$241 billion), worsened by state guarantees on notes issued by troubled fund 1MDB. Beyond this, the economic growth is slowing down too. H2 2018 showed a 4.5 percent growth and this missed all economist estimates. (This meant no one expected such a low growth) Another talk was the inheritance tax but this may not be so soon and the government may only decided in the next few years if they are feasible, The Star reported, citing unnamed sources. Please refer to the full article here.

Taxes are needed for all governments so that they can also have revenues to push for higher growth. Just remember that many governments were ‘changed’ because of tax issues too. Just google and you will know what I mean. Broad based taxes may be covering everyone but this allows the government of the day to then decide how to redistribute this to the needy if they are serious about caring for the people. Narrow based taxes are good because it will enable the government to be more focused and they have flexibility to introduce different taxes for different purposes. Readers of would know that I favour GST but as a Malaysian, I support initiatives of the government of the day and continue to write good things about our country, everyday. 🙂

written on 18th Oct 2018

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  • Teoh SC on October 20, 2018

    Why change gst to sst & intro more tax??

    • on November 7, 2018

      Teoh, I have been asking the same question too.

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