Malaysia Considers Bringing Back Consumption Tax to Boost Finances
The Malaysian government is contemplating the possibility of reinstating a consumption tax as a means to strengthen the country's financial position and address the economic challenges that arose following the COVID-19 pandemic. The Ministry of Finance, led by Minister Tigaü Tuan, is exploring various revenue sources to stabilize the budget and ensure sustainable economic growth.
The consumption tax was introduced in Malaysia in 2015 but was abolished in 2018 by the government that came to power after elections. The repeal of the tax resulted in a sharp decline in state revenue, negatively impacting the finances of the country. With the government now focusing on recovering the economy from the crisis, the reinstatement of the tax is being considered as a way to increase tax income.
Experts emphasize that a consumption tax could serve as an effective tool for replenishing the budget, given its broad coverage of goods and services. However, some community representatives express concerns that reintroducing the tax might adversely affect the purchasing power of citizens amidst already high inflation and an unpredictable economic environment.
According to the minister, the government will carefully consider citizens' opinions and consult with experts to make an informed decision. There is also hope that any changes in tax policy will be transparent and aimed at supporting economic growth and social programs.
To implement this initiative, the government will need to facilitate extensive discussions with citizens and businesses to minimize negative impacts and establish a constructive dialogue. Ultimately, the goal is to impose the consumption tax in such a way that it contributes to the economic recovery of the country and enhances the welfare of its population.
Thus, the return of the consumption tax could represent a significant step for Malaysia toward recovering its finances and improving the economic situation in the country.
