MCA Wilayah Persekutuan new media bureau deputy head Chris Daniel Wong expressed concerns over the growing financial burden on Malaysians. While Feb 1, 2024, is a public holiday in the Federal Territories, the simultaneous increase of water rates by 22 sen/m3 or up to 15% dampens the celebratory mood.
The surge in water tariffs follows a series of tax hikes implemented since the start of the year.
In January 2024, new taxes such as the low value goods tax (LVGT) at 10% for e-platforms, a 10% capital gains tax (CGT) and a 5% increase in electric bills for the M40 were introduced. February will bring an average 15% spike in water tariffs.
March 2024 will witness additional tax burdens with the sales and service tax (SST) climbing from 6% to 8%, an expanded service tax, an 8% tax on traditional and complementary medicine services, and digital service tax (DST) increase from 6% to 8%.
In May 2024, the high value goods tax (HGVT) or luxury goods tax will rise by 10%.
The first half of 2024 will also see the withdrawal of bulk subsidies for RON95 and diesel. These cumulative tax hikes significantly impact the purchasing power of the average Malaysian.
Wong raised questions about the transparency of the 10% tax on LVG purchased online, emphasising the need for clear itemisation to prevent abuse through creative accounting.
“On the 10% tax for LVG purchased online, how will transparency be defined and practised to itemise the 10% tax in the bill? Creative accounting for e-commerce purchases opens the itemised listing to abuse.”
Amidst these concerns, Wong suggested revisiting the goods and services tax (GST), citing its success in generating RM44 bil in 2017. He proposed reinstating the GST at a lower rate of 4%, arguing that this move could help alleviate the financial strain caused by new and higher taxes.
“Wouldn’t it be more feasible and pragmatic to revive the GST but at a lower rate of 4%, so we can hose away all the new and higher taxes?
“Implemented in more than 170 countries worldwide, the GST has proven to prevent leakages, is transparent, and collects revenue from a wider pool of consumers. GST also encourages prudent spending.”
Moreover, Wong criticised the irony of Pakatan Harapan’s (PH) manifesto promises to reduce the cost of living, highlighting that the current slew of taxes, introduced to avoid reinstating the GST is causing prices of daily essentials and utilities to soar.
“Strident in opposing the GST, how could DAP with a Finance Minister after the 14th General Election (GE14) and Deputy Finance Ministers after GE15 allow these new taxes and SST rise to gush down on everyday Malaysians?” – Jan 17, 2023
