PM suggests new taxes needed to tackle debt pile

KUALA LUMPUR, Oct 9 — The government may need to consider additional forms of taxation to address the debt amassed by the previous Barisan Nasional government, said the prime minister.

During his keynote address at the “Malaysia: A New Dawn” economic forum today, Tun Dr Mahathir Mohamad conceded that the move will be unpopular, but said the only other option was to sell off the nation’s assets.

“It was suggested we should have new taxes. I don’t think that is something that is welcomed by the people.

“But we may have to devise new taxes in order to have the money to pay our debts. Of course the other thing we can do is to sell our assets,” he said.

Such assets invariably include state-owned land, the PM noted before saying he did not think this to be a wise course of action if it meant selling to foreigners.

“But we can still sell land to locals so they can develop housing projects and settlements that they believe will give them a return,” he said.

He compared the severity of the government’s current challenge to the 1997 Asian Financial Crisis, but noted that at least the ringgit was resilient now.

Dr Mahathir did not offer hints of when these new taxes may be introduced, but Finance Minister Lim Guan Eng is due to table Budget 2019 on Nov 2.

The PM also said there is an urgent need to expand the economy to drive up revenue and for Malaysians to enjoy the fruits of such growth.

Earlier in his speech, Dr Mahathir observed a disconnect between the country’s reported gross domestic product (GDP) growth rates and the welfare as well as prosperity of Malaysians.

He conceded that while the country’s economic growth was “all right”, this did not translate directly to higher income for the people.

The pressure on average wage earners had been worsened by the previous government’s policies, he said.

“In the meantime there is a necessity to grow the economy. If we grow the economy at a high rate then the (country’s) debts will appear smaller than it is now. The [debt-to-GDP] ratio would be resolved by increasing or growing the economy of this country,” he said.

Dr Mahathir explained that he actively solicited investments during his visits to the US and the UK, saying his efforts received promising response.

The prime minister then ventured into the topic of Bitcoin, saying he did not trust the new financial technology development, primarily due to not understanding the value proposition behind the cryptocurrency.

Dr Mahathir said he has not worked out how a virtual currency that once cost cents could now be worth thousands of dollars.

Bitcoin, the best known cryptocurrency among myriad copycats, came close to breaching US$20,000 last year.

“I must admit I can't use this money because I don't know what the value is. But now we are having more and more of this virtual money and I'm quite sure it will affect the markets or countries with whom we trade,” he warned.