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KUALA LUMPUR: The Ministry of Finance (MoF) has established a committee to study various revenue improvement measures, including the possibility of reintroducing the goods and services tax (GST), according to Maybank Investment Bank (Maybank IB) Research.
In a note published today after a dialogue with the Minister of Finance, Tengku Datuk Seri Zafrul Abdul Aziz (pix) last Friday, Maybank IB Research quoted Tengku Zafrul as saying that other measures included analyzing weaknesses in the tax regime and the impact of new taxes on the economy, studying options for new taxes such as the carbon tax and the digital tax, streamline tax incentives and improve taxes. administration and improve tax auditing, such as the implementation of tax identification numbers and the improvement of data analysis.
“Timing is also important, especially with new taxes, so as not to interrupt the economic recovery process.
“2021 is a year of transition from crisis to recovery,” he quoted Tengku Zafrul.
In the medium term, Tengku Zafrul said the government is committed to reducing the budget deficit to four percent of gross domestic product (GDP) by 2023.
“The key strategy will be revenue improvement given the limited scope to cut spending, as 95% of operating expenses are ‘locked’ obligations, such as emoluments, debt service charges and retirement charges,” he said .
On the glove sector, Tengku Zafrul said glove manufacturers’ corporate income tax is projected at RM2.8 billion in 2020 and RM4.7 billion in 2021.
“The government decided that no windfall tax will be imposed on glove manufacturers to avoid potential ‘opportunity costs / losses’, such as glove manufacturing companies that invest abroad rather than in Malaysia, and ship a wrong signal to existing and potential investors in other industries. ” was quoted as saying.
On the RM400 million contribution from glove manufacturers as announced in the 2021 budget, Tengku Zafrul said the contributions are voluntary and above the glove manufacturers record corporate income taxes of 2.8 billion. ringgit in 2020 and ringgit 4.7 billion in 2021.
On the Covid-19 vaccine, the finance minister said that the 2021 budget has allocated RM3 billion to procure vaccines through Malaysia’s participation in the World Health Organization’s COVAX program and negotiations with pharmaceutical companies that carry out clinical trials of vaccines in stage 3, with the aim of obtaining vaccines in the first quarter of 2021. – Called
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