Income tax cut unlikely in near term with GST

Published: Saturday October 12, 2013 MYT 12:00:00 AM 

Updated: Saturday October 12, 2013 MYT 7:28:50 AM

KUALA LUMPUR: Any reduction in personal and corporate income tax is unlikely in the near term following implementation of the goods and services tax (GST), due to uncertainty in the global and local economies, as well as adaptation of local businesses to the new tax structure.

Taxand Malaysia Sdn Bhd chairman Dr Veerinderjeet Singh said that Malaysia was currently in a period of uncertainty and it was not the right time to reduce income tax, even with the GST in place.

“I hold the view that you should not be reducing the income tax now. If you look at the statistics, we are having a fiscal deficit without a booming economic climate, while expecting slower growth this year.

“It is better to wait and clear the other issues first, such as reviewing the incentives structures for the future,” he added.

He told reporters this after presenting a paper, GST: The Good, The Bad and The Ugly, at a seminar organised by the Malaysian Economic Association in Kuala Lumpur yesterday.

Veerinderjeet said lower income tax would attract more businesses to Malaysia, but due to the current global economic situation, the desired effect was unlikely to happen or might be less than expected.

On GST, he said it would probably take effect in 2015, if implemented, with the necessary procedures in place on educating the people, which takes at least a year. — Bernama