27 Oct - 2 min read
Experts have expressed concern over the government possibly forming new taxes in Budget 2022, and instead called for tighter expenditure controls to prevent corruption and leakage.
Assoc-Prof Ahmed Razman Abdul Latiff, Manager of Business Development of Putra Business School, explained that tighter measures can help to control licensing and importation of high-duty goods such as cigarettes and tobacco products, combat illegal trade, and improve compliance. This will lead to increased revenue gain and improved economic growth.
“If it can be controlled, the government has no reason to implement a new tax. Other avenues including higher commodity prices for oil, crude palm oil, and rubber will be enough to finance the budget if there is not much revenue leakage,” he said.
The government is currently looking at other ways to fight corruption and prevent revenue leakages. This includes implementing a Tax Identification Number (TIN), imposing excise duty on electronic and non-electronic cigarette devices, and expanding the tourism tax levy for accommodation booked through online services.
Budget 2022 is also expected to finance the implementation of the 12th Malaysia Plan (12MP) with a development expenditure of RM 400 billion over the next five years until 2025.
According to economist Datuk Madeline Berma, the pandemic gives an opportunity for change to improve the country’s economy. She hopes that the budget will show the government’s commitment to the people and how it plans to spend the country’s money.
Likewise, Razman highlighted that recovery is crucial as the country enters an endemic state and the budget should factor in that not everyone can recover quickly. After all, the pandemic has already shifted the country’s socio-economic status, causing the B40 to expand into the B50. Furthermore, the country’s average salaries fell for the first time since the Department of Statistics Malaysia started the Salaries and Wages Survey Report.
Subscribe to our exclusive weekly newsletter and we’ll bring you the week’s highlights of financial news, expert tips, guides, and the latest credit card and e-wallet deals.
Stay tuned for what’s to come next in the personal finance world