Thorough study needed for new taxes: Economist
Published on: Wednesday, October 17, 2018
Kuala Lumpur: A thorough study is needed before the introduction of any new tax mechanism in Budget 2019 as a potential new revenue stream, says an economist. In making the call, Alliance Bank Malaysia Bhd Chief Economist Manokaran Mottain said new taxes such as the capital gains tax would affect the capital market.A capital gains tax is a tax levied on capital gains or profits from the sale of specific types of assets.
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The most common capital gains are realised from the sale of stocks, bonds, precious metals and property."When you impose that on Malaysia, foreign fund managers will run away from here. We do not have domestic fund managers quick enough to support (the market). I would say you need to have a thorough study on that, maybe not now, next year you can introduce," he added.Manokaran was speaking to reporters on the sidelines of the Malaysian Economic Summit 2048 organised by Kingsley Advisory and Strategic Initiatives here. He said he did not expect the government to increase corporate tax as it would deter new investments.
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Prime Minister Tun Dr Mahathir Mohamad had indicated that the government's budget for next year, to be tabled on Nov 2, will be austere.The budget will entail many measures such as new forms of taxes as the government looks to boost its revenue.
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In 2017, the official total government debt and contingent liabilities were at RM686.8 billion and RM238.1 billion respectively.On Budget 2019 expectations, Manokaran said the government could save up to RM3 billion in handouts, by narrowing down the scope to benefit those in real need, instead of referring to income level alone, as well as focus on ways to help the rakyat, especially those in the B40 income group.He added that an increase of US$1 per barrel in Brent crude oil price could result in an additional RM300 million in revenue and estimated additional revenue of RM6.3 billion to the government's coffers. Stay up-to-date by following Daily Express’s Telegram channel.
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