Luxury tax good move but won't replace GST - CAP
The luxury goods tax was a positive step taken by the government, but it is not an alternative to the Goods and Services Tax (GST), said the Consumers' Association Penang (CAP).
Weighing in on Budget 2023, the association said that while specific measures will provide short-term relief, more significant action is needed to address the rising cost of living.
“We think it’s a...
The luxury goods tax was a positive step taken by the government, but it is not an alternative to the Goods and Services Tax (GST), said the Consumers' Association Penang (CAP).
Weighing in on Budget 2023, the association said that while specific measures will provide short-term relief, more significant action is needed to address the rising cost of living.
“We think it’s a good move. It’s practised in several countries.
“It cannot be an alternative to GST. It will contribute to the government’s revenue to some extent,” CAP president Mohideen Abdul Kader told Malaysiakini last night.
CAP also welcomed the government's consideration of a capital gains tax on securities, a measure that the association has called for in the past.
While subsidies, aids, and the recently launched Menu Rahmah and Jualan Rahmah programmes can provide temporary relief to struggling consumers, the association stressed that these are not long-term solutions.
It argued that the root of the problem lies in Malaysia's heavy dependence on food imports.
“We need to tackle the source problem which is food imports.
“We must invest in food agriculture, increase the productivity of farmers, improve the market, and eliminate cartel profiteering,” Mohideen added.
Consumer protection
On the issue of consumer protection, CAP expressed support for the Consumer Credit Act, which it had been advocating for a decade.
The association believes that the act, along with the proposed Consumer Credit Monitoring Board, will help protect consumers’ rights.
CAP also supported the government's plan to have prisoners practise agriculture, a move it believes could rehabilitate prisoners and help them become “productive citizens”.
Yesterday, Prime Minister Anwar Ibrahim, when tabling Budget 2023 in Dewan Rakyat, announced that the government plans to implement a new tax on luxury goods as a progressive effort to tax the wealthy.
While the specific tax rate has not been revealed, Anwar mentioned that there will be an upper limit based on the type of luxury goods being taxed.
The government will also be implementing a Capital Gains Tax on the sale of unlisted shares by companies starting next year.
Anwar also emphasised that the government has no intention to reintroduce GST given the current circumstances where food inflation has exceeded five percent, and many people are still struggling with low wages.
