Coherent Sst Reform Requires Zero Exemptions For Policymakers


 
THE Malaysian government’s recent changes to the Sales and Service Tax (SST) are true to an at least decade-old tradition of self-defeating consumption tax policies.

Raising taxes is a thankless but necessary task that requires astute policy design and nuanced messaging to manage both economic and political narratives.
Both the 1 July changes and the case for them have left policymakers open to justifiable but needless criticism.
Malaysian policymakers have long recognised the need to significantly increase revenue collections but have struggled to convince Malaysians.
Tax reforms repeatedly adopt a narrow, small-target strategy that—by lacking both vision and tangible economic sustainability and equity objectives—instead become lightning rods for critics.
Malaysians worried about their household budgets naturally fear higher taxes and do not count fiscal sustainability among their chief concerns.
(Image: Bernama)Making the case for consumption tax reform needs and deserves better than pointing to unsustainable budget deficits and delivering patronising rebukes of SST critics.
It requires a consistent, coherent and non-condescending narrative that garners public support for changes that will improve not threaten their livelihoods.
Policymakers should be explaining the importance of taxing consumption, how it supports a tax strategy that balances fairness, competitiveness and sustainably, and how the money raised will be used to benefit Malaysians.
Consumption taxes have advantages that are especially relevant to Malaysia’s circumstances. Malaysia has a large visiting and undocumented population whose income cannot be taxed but whose consumption can be.

It has a sizeable informal sector contributing around a quarter of gross domestic product, whose income likewise escapes direct taxes but whose inputs may be partially captured by consumption levies.
Shaping consumption choices through price signals will be essential to making Malaysia’s future economic development less carbon intensive and more sustainable.
Consumption taxes progressed alone cannot address Malaysia’s revenue needs or be implemented equitably. Consumption taxes are regressive as low-income households consume more of their disposable incomes and therefore experience a greater relative impact.
Attempts to neutralise these impacts by exempting or setting to zero the rate for basic goods introduces complexity for businesses and consumers, exempts rich and non-Malaysian consumers at the same time, and opens policymakers to arguments of inconsistency or bias.
Accompanying changes to income taxes, transfers or welfare for low-income households would be a superior approach.
Malaysians would be more receptive to tax hikes if their purpose were more tangibly linked to spending for their benefit.

Public wariness remains high in the shadow of 1MDB and other newsworthy examples of funds being misused, with the government’s fiscal challenges explicitly associated with corruption.
At the same time Malaysians want better schools and hospitals, greater access to safe and efficient transport and technology, more generous social welfare and more. Transparent and well communicated spending intentions are an essential enabler of tax reform.
The SST reforms have thus far been mapped poorly in these regards. Far from presenting a coherent vision for equitably, efficiently and sustainably raising revenue to spend in the interests of Malaysians, the reforms adopt a piecemeal and discriminatory approach to taxation.
Two particularly concerning elements that have attracted fair criticism are the inclusion of basic goods and differential rates for local and imported goods.
Malaysia is a net importer of food including many staple products, with openness to trade a critical contributor to food security both at the household and national levels.
(Image: Malay Mail/Firdaus Latif)SST increases that represent an implicit import tariff, especially on basic and healthy goods like fruit, send precisely the wrong signal at a time when Malaysia is trying to counter global economic policy uncertainty.

Malaysia must reinforce its openness to trade and investment by avoiding discriminatory taxes on overseas goods.
Bowing to public backlash to provide post-announcement tax exemptions for imported apples and oranges (among other changes) further illustrates the policy development and communication shortcomings.
Policymakers were either unaware of or misread public sensitivity on the price and availability of basic food imports, and in the absence of a compelling defence for the proposed SST increase were forced to make concessions.
Evident is both a need for wider consultation and that complex and subjective tax design leaves policymakers exposed.
Making the case for tax reform in Malaysia should also stick to message not mechanism. Long-running arguments comparing the SST with a restored GST are of greater distraction than consequence to the current debate.
Either mechanism can be tailored to achieve comparable coverage and revenue outcomes, and tax incidence (who ultimately pays: consumers or producers) is determined by markets not tax design.

Differences in administrative efficiency and effectiveness are important considerations that are adaptable to a consumption tax with either (or any) name.
What Malaysia needs from policymakers is greater tax policy reform coherence, communication and ambition. And the leadership to design and deliver tax strategies and mechanisms that benefit Malaysia and Malaysians.
Dr Stewart Nixon is the deputy director of research at the Institute for Democracy and Economic Affairs (IDEAS).
The views expressed are solely of the author and do not necessarily reflect those of  MMKtT.
- Focus Malaysia.


Artikel ini hanyalah simpanan cache dari url asal penulis yang berkebarangkalian sudah terlalu lama atau sudah dibuang :

http://malaysiansmustknowthetruth.blogspot.com/2025/07/coherent-sst-reform-requires-zero.html

Kempen Promosi dan Iklan
Kami memerlukan jasa baik anda untuk menyokong kempen pengiklanan dalam website kami. Serba sedikit anda telah membantu kami untuk mengekalkan servis percuma aggregating ini kepada semua.

Anda juga boleh memberikan sumbangan anda kepada kami dengan menghubungi kami di sini
No Reason For Price Hike As Refined Sugar Remains Exempt From Sst Finance Ministry Tells Msm

No Reason For Price Hike As Refined Sugar Remains Exempt From Sst Finance Ministry Tells Msm

papar berkaitan - pada 20/6/2025 - jumlah : 152 hits
Packets of sugar are stacked on shelves at a supermarket in Kuala Lumpur October 16 2024 Picture by Firdaus LatifKUALA LUMPUR June 20 Refined sugar remains tax free under the revised Sales and Service Tax that will take effect on July 1 202...
Reform Requires More Than Rhetoric It Needs Courage

Reform Requires More Than Rhetoric It Needs Courage

papar berkaitan - pada 19/6/2025 - jumlah : 136 hits
When Azalina Othman Said said that reforms take time she was right No one expects institutional reform to happen overnight She stressed that policymakers must ensure every reform is not only ambitious but also implementable That sentiment i...
Power Rate Exemptions For Low Usage Consumers

Power Rate Exemptions For Low Usage Consumers

papar berkaitan - pada 22/6/2025 - jumlah : 191 hits
Tenaga Nasional says consumers who use less than 600 kWh a month will also enjoy higher incentive rates for energy efficiency A new national power tariff from July 1 includes exemptions for households with low usage says Tenaga Nasional PET...
Sewerage Bills In Malaysia What Are You Really Paying For

Sewerage Bills In Malaysia What Are You Really Paying For

papar berkaitan - pada 26/6/2025 - jumlah : 214 hits
Indah Water Konsortium explains the costs behind wastewater services rising tariffs and why your continued support matters and 2025 The revised tariffs reflect the need to sustain and enhance Malaysia s sewerage system to meet modern standa...
Choosing The Right Mortar Cement For Reliable Masonry Work

Choosing The Right Mortar Cement For Reliable Masonry Work

papar berkaitan - pada 25/6/2025 - jumlah : 218 hits
plays an essential role in the industry especially in projects involving bricklaying block work and stone installations Its strength consistency and compatibility with various materials make it a preferred choice for both small and large sc...
Cabinet Allows Spm A Grades For Matriculation Placement

Cabinet Allows Spm A Grades For Matriculation Placement

papar berkaitan - pada 26/6/2025 - jumlah : 156 hits
The cabinet today announced that all students who scored 10As and above including A in the 2024 SPM examinations will receive places in matriculation programmes regardless of their racial background ADS This is in line with Prime Minister A...
Hitachi Vantara Named Leader In Ai Ready Storage For 2025

Hitachi Vantara Named Leader In Ai Ready Storage For 2025

papar berkaitan - pada 24/6/2025 - jumlah : 135 hits
Hitachi Vantara Dominates AI Storage Game in 2025AI is only getting bigger and so is the need for smart fast and scalable storage Hitachi Vantara just made headlines by being named a Leader and Fast Mover in the 2025 GigaOm Radar for AI rea...
Tnb S Share Price Falls After Federal Court Decision On Lhdn Case

No Promotions For Macc Officers With Bmi Above 27 From Next Year

Pengalaman Laparoskopi Buang Cyst Ovari Dari Tanda Sampai Sembuh

Dua Maut 16 Cedera Nahas Bas Persiaran Dengan Dua Lori

Nak Tanya Bekas Ketua Polis Negeri Sarawak Apa Manfaat Vape Ni Ye

Resepi Sup Bayam Dengan Cendawan

Senior Glc Manager In Sabah Nabbed Over Alleged Bribery

Ahli Parlimen Temerloh Gesa Kerajaan Agensi Berkaitan Naik Taraf Dan Baik Pulih Bekalan Air Pahang Tanpa Alasan


echo '';
Info Dan Sinopsis Drama Berepisod Dendam Seorang Madu Slot Tiara Astro Prima

10 Fakta Biodata Amira Othman Yang Digosip Dengan Fattah Amin Penyanyi Lagu Bila Nak Kahwin

5 Tips Macam Mana Nak Ajak Orang Kita Suka Dating Dengan Kita

Info Dan Sinopsis Drama Berepisod Keluarga Itu Slot Lestary TV3

Bolehkah Manusia Transgender Mencapai Klimaks Selepas Bertukar


Top 5 Kamera Cctv Wireless Murah Senang Pasang Untuk Rumah Flat

Percutian 3h2m Ke Pulau Redang Terengganu Part 1

Opening Up Zero Knowledge Proof Technology To Promote Privacy In Age Assurance

Cara Mudah Naikkan Jualan Harian Anda Dengan Sleeve Cup Custom

Insiden Letupan Gas Putra Heights Menteri Besar Selangor Dakwa Siasatan Dilakukan Dengan Bebas Dan Telus

Huawei Mungkin Dahului Apple Guna Memori Telefon Berkelajuan Tinggi