No need GST, CAP proposes luxury and carbon taxes to boost income

Mohideen proposed for the introduction of a luxury tax, a mechanism that will also help the government address the inequality gap between the haves and have nots. Source (pic): NST Online

Consumers Association of Penang (CAP) acting president Mohideen Abdul Kader said today there are other relevant forms of taxation that the government can implement or re-introduce to boost its coffers and shield the country from global financial uncertainties instead of reverting to the Goods and Services Tax (GST).

“If raising income for the country is a serious concern, the government should consider introducing a luxury tax as the impact would only be felt among the ‘super rich’.

Mohideen said the government should also consider introducing a carbon tax. Apart from becoming a new source of income, it would help to protect the environment.

“The introduction of a carbon tax will solidify the governme-nt’s commitment towards reducing carbon emissions,” he said.


KUALA LUMPUR: There are other relevant forms of taxation that the government can implement or re-introduce to boost its coffers and shield the country from global financial uncertainties instead of reverting to the Goods and Services Tax (GST).

Consumers Association of Penang (CAP) acting president Mohideen Abdul Kader proposed for the introduction of a luxury tax, a mechanism that will also help the government address the inequality gap between the haves and have nots.




He said the implementation of a luxury tax would resonate well with the current administration’s Shared Prosperity Vision in bridging the income gap between the B40 and T20 segments.

“If raising income for the country is a serious concern, the government should consider introducing a luxury tax as the impact would only be felt among the ‘super rich’.

“This tax mechanism has also been implemented in other countries such as Indonesia, Thailand, Chile, Tunisia and Botswana,” he said.

According to the Organisation for Economic Cooperation and Development, the luxury tax was a tax levied on products and services considered non-essential, such as cars above a certain value, jewellery, yachts, precious stones and metals.

Mohideen said the government should also consider introducing a carbon tax. Apart from becoming a new source of income, it would help to protect the environment.

“The introduction of a carbon tax will solidify the governme-nt’s commitment towards reducing carbon emissions,” he said.

Under the Paris Agreement, 196 countries including Malay-sia, would reflect targets and steps to reduce emissions in their national plans.

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In the previous federal administration, the cabinet pledged a 45 per cent reduction in greenhouse emissions by 2030 as well as reduce 32 million tonnes of carbon emissions by next year.

Mohideen reiterated calls for the government to reintroduce the inheritance tax, which the association deemed as the best solution for the government to tackle problems related to wealth inequality among people in the country.

He said many countries around the world imposed inheritance tax or its equivalent, which provided revenue to the nation’s coffers.

Mohideen said if implemented properly, inheritance tax would not affect those from the lower income segment.

Malaysia, he said, had abolished estate duty in 1991. Prior to the move, estate duty was applicable only if the net worth of the estate exceeded RM2 million.

The rates were five per cent on estates worth RM2.4 million and 10 per cent on everything above that.

“If the government wants to reintroduce inheritance tax, based on the present situation, it should be imposed on estates worth more than RM3 million to protect the people in the lower income group.”

Prime Minister Tun Dr Mahathir Mohamad had previously said the government may bring back GST “if the people wanted it”.

The government, he said, would be conducting a study to check if GST is better than the Sales and Services Tax.

Mohideen said the government should present a valid reason if it plans to change the present tax regime to the GST.

“In its election manifesto, Pakatan Harapan had promised to abolish the GST and they honoured the pledge after forming the federal government. I am sure PH had considered all implications. The government must provide good reasons if it plans to revert to GST.”

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