Economists have called on the government to review the overall tax structure and look into additional measures to increase its revenue stream.
Khazanah Research Institute senior adviser Prof Jomo Kwame Sundaram said while it would be relatively easy to reimplement and tweak the Goods and Services Tax (GST) as it was used before, this by itself might be insufficient to generate the needed revenue increase.
“(Not only that) I think we have an inequitable tax structure on both the taxation side as well as on the spending side but also, we do not collect very much in terms of taxation as much as we spend.
“Hence, the overall tax structure needs a review and the government should design a more progressive value-added tax,” he said at the MARC360: Malaysian Economic Outlook and Challenges virtual discussion organised by the Malaysian Rating Corporation Bhd (MARC) here today.
Jomo said although it is understandable that the new government could not change everything overnight, it should start making efforts towards making more adjustments.
“As for me, I am totally against the GST’s reintroduction just for the sake of adding to the country’s revenue,” he said.
On the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Jomo said the government should review the free trade agreement (FTA) as it mainly benefitted a few big companies and businesses and would worsen inequality in the local economy.
The CPTPP is an FTA signed by Malaysia, Australia, Brunei, Canada, Chile, Japan, Mexico, Peru, New Zealand, Singapore and Vietnam.
The agreement came into force for Australia, Canada, Japan, Mexico, New Zealand and Singapore in December 2018, Vietnam in January 2019, Peru in September 2021 and Malaysia on Nov 29. — BERNAMA