PETALING JAYA, Nov 13 — New taxes coupled with broadening of Sales and Services Tax (SST) is expected to take place in the next three to five years, said Deloitte Malaysia Executive Director — Business Tax, Chia Swee Hoe.
Chia said the six per cent SST is also expected to be increased over the same duration to cover the government’s revenue shortfall of more than RM20 billion after abolishing the Goods and Services Tax (GST).
“Right now, only 38 per cent under the Consumer Price Index (CPI) is now under SST compared to 60 per cent under GST. I believe this would be broadened from time to time, in line with a salary increase,” he said at the Real Estate and Housing Development Association (Rehda) 2019 Budget Commentary here today.
Chia also said that the new taxes would focus more on consumption, but added that the government needs to look into the rising cost of living before implementing any new tax.
“In the future, the government might modify and rebrand SST into a more structured tax system,” he said.
Under the Budget 2019 announced on November 2, the government will impose an excise tax of 40 sen per litre on sweetened beverages starting April 1, 2019, while a digital tax will be implemented from January 1, 2020.
Meanwhile, MIDF Amanah Investment Bank Bhd’s Chief Economist Kamaruddin Mohd Nor said the ringgit’s performance is still resilient compared to other currencies like the Indian rupee and Indonesian rupiah.
“The weakening of the ringgit now is due to external factors such as the trade war, oil prices and the strengthening of the US dollar. These factors are something we cannot control,” he said.
He added that Malaysia’s economic fundamentals are still strong and the domestic economy is still resilient, helping to push the ringgit by year-end.
“The ringgit is now undervalued and we hope it could reach 4.10 by year-end,” he said.
The ringgit is currently at 4.1940/1970 versus the greenback from 4.1860/1900 at the close yesterday while Brent Crude stands at US$69.38 per barrel. — Bernama