Bringing back GST would provide only marginal gains, but a tax on the rich through share dividends would provide much more revenue, says Barjoyai Bardai.
Company profits are taxed, but the profit distributed to shareholders is not taxed at present. An economist says such a tax will raise more revenue than GST.
Barjoyai Bardai of Universiti Tun Abdul Razak called for a double taxation approach for corporate income, Yeah Kim Leng of Sunway University proposed a capital gains tax on unlisted shares, and Lai Wei Sieng of Universiti Kebangsaan Malaysia said tax rates for those in high income brackets should be raised.
The reintroduction of GST has been urged by some groups making suggestions for next year’s federal budget. Barjoyai said GST was likely to yield a marginal increase of RM8 billion annually.However, if taxes were imposed on dividends paid to shareholders of listed companies, “I think they will easily generate RM50 or 60 billion in tax immediately,” he told FMT.
The policy allows about 100,000 families to live without paying any income tax despite living on income from dividends. “So they are rich, but have never tax all their lives,” he said, adding that such “discrimination” that favoured the rich should be halted.Yeah said that the proposed inclusion of a capital gains tax on unlisted shares, as stated in the revised 2023 budget, could offer an additional avenue to boost revenue.
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