Govt mulls carbon tax and return of GST

Jerrica · Nov 23, 2020 05:40 PM

Govt mulls carbon tax and return of GST 01

The Ministry of Finance (MoF) has set up a committee to study various revenue enhancing measures including the possibility of reintroducing the Goods and Services Tax (GST) and imposing new taxes like carbon tax.

In a note from Maybank Investment Bank (Maybank IB) Research, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz was quoted as saying that MoF is also analysing other aspects of the taxing system.

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Amongst them included analysing weaknesses in the current tax regime and impact of new taxation on the economy, studying options for new taxes such as carbon tax and digital tax, and rationalising tax incentives.

In addition to that, they will also look into improving tax administration and enhance tax audit, such as implementing tax identification numbers and enhancing data analytics.

Govt mulls carbon tax and return of GST 01

“Timing is also important – especially on any new taxes – so as not to disrupt the economic recovery process. 2021 is a transition year from crisis to recovery,” it quoted Tengku Zafrul as saying.

In the note, Tengku Zafrul also said that the government is committed to lowering the budge deficit to 4 percent of gross domestic product (GDP) by 2023. The key strategy will be on revenue enhancing despite the spending cut.

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If you’re wondering about the carbon tax, it’s a tax system with an intend to reduce carbon dioxide emissions for both transport and energy sector. The implementing of this tax might have a direct impact to our car taxing system.

Neighbouring countries that have already imposed a carbon tax on cars include Thailand hence why cars like the Toyota Yaris and Yaris Ativ have smaller 1.2-litre engine rather than a 1.5-litre engine like in Malaysia.

Jerrica

Writer

There isn’t a time in memory that doesn’t involve staring at cars. After discovering the excitement of watching Schumacher vs Hakkinen, Formula 1 became a major part of life. The love for cars and F1 ultimately led to a job with CAR Magazine. The untimely death of the magazine meant a hiatus from cars at lifestyle women’s magazine Marie Claire before another opportunity came knocking again.

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