Make face masks tax deductable in Budget
Published on: Sunday, August 23, 2020
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There are approximately nine million households in Malaysia, each having an average of four persons (Selected Demographics Indicators Malaysia, 2018, Department Statistics of Malaysia). A household would have to spend RM120 a month or RM600 until year-end (Aug 1, when wearing of face masks in public areas was made compulsory, to Dec 31) to purchase disposable face masks, assuming each piece costs RM1.
The computation extends to Dec 31 because the taxable period for individuals follows the calendar year. (Hopefully, the pandemic would have been resolved by then.)
There are two extremes to the expenses for face masks. Some might choose to the wear re-usable types, which are more expensive, while others opt for the cheaper disposable ones.
Whatever the choice, people still need to pay for the masks until whenever the Covid-19 situation is resolved. On top of this, they also have to spend money on sanitisers, soaps, bleach, etc, to maintain cleanliness. If the purchase of face masks is made tax-deductible, people might not hesitate to buy and wear them. Companies could also purchase masks for their employees and the public to make good use of the tax benefit.
People might also buy the more expensive re-usable face masks, thus reducing the use of the disposable type, which, because they are discarded by the millions daily, is damaging the environment.
Setting a ceiling price on disposable face masks ensures that everyone can afford them, and this is important since it is mandatory to mask up in public. But perhaps the government should consider alternative methods to manage/control the pricing of face masks to manage the country’s revenue.
The first method is to provide a tax exemption of a certain percentage to those sellers and/or manufacturers that are complying with the ceiling price on disposable face masks. The second method is to fully tax sellers and/or manufacturers who sell masks above the ceiling price.
Currently, there are many avenues to purchase these masks, hence enforcing the ceiling price will be quite a gigantic task for the authorities concerned. By applying the first method, the onus would be on the sellers and/or manufacturers to show their compliance with the ceiling price if they want to enjoy the tax exemption.
Inevitably, some face masks will cost more to make as the manufacturers have to carry out quality assurance and quality control to ensure their output meets standards. So the second method allows the manufacturers to sell their face masks without loss but they will be taxed instead.
AKN
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