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Thursday, May 8, 2014

Introduce luxury car tax for wealthy

Published: Thursday May 8, 2014 MYT 12:00:00 AM 
Updated: Thursday May 8, 2014 MYT 7:59:09 AM

THE GST is an efficient and reliable income source for the Government but it has a great effect on low and low-middle income earners.

My 19 years’ hands-on GST experience in Singapore and my taxation lectures for British and Australian degrees have shown that even zero-rated supplies are affected by input costs. Wages have to be increased due to inflation but consumption tends to decrease. The economic inequality too tends to increase.

A tax system is a fair system where the high income earners, who had benefited from the contributions from the rest of society, should bear a higher tax burden.

Using the argument that other countries use the GST and Malaysia should follow leads to the proposal of the introduction of a “Luxury Car Tax”, as done in Australia.

Owners of luxury cars want the public to recognise their status. The Luxury Car Tax should exempt cars costing less than RM100,000.

Anything in excess should be taxed at a high rate.

This would help the Government pay for the economically weak members of society and for the reduction of the personal and corporate tax rate.

Kuala Lumpur

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