KUALA LUMPUR: Malaysia needs a change in mindset, instead of engaging in what type of tax regime that should be implemented during the crucial post-Covid-19, said UHY Malaysia managing partner Datuk Alvin Tee.
Tee said while the recent talk of changes to the tax regime was healthy, the top priority should be on restructuring mindset.
The Federation of Malaysian Manufacturers (FMM) had this week issued a statement in favour of the government's proposal for a reintroduction of the Goods and Services Tax (GST) .
FMM said it had been a strong supporter of GST compared to the Sales and Services Tax (SST) as the former was more transparent and effective, with over 160 countries having implemented it.
Tee said if the GST was to be reintroduced, provisions had to be made to protect vulnerable groups "because good governance equals to eradication of poverty and improving the quality of their lives".
He noted that the B40 was the most vulnerable group.
In a nutshell, Malaysians are categorised into three different income groups: top 20 per cent (T20), middle 40 per cent (M40) and bottom 40 per cent (B40).
Tee said although on paper, the bar for each group's income level had increased, there were other factors in play.
"We must not ignore the upward costs of living which results in inflation, slower wage growth and the ringgit's purchasing power abroad."
He noted that post-Covid-19, the trend world wide would be for government's to refill public coffers, that had been depleted due to lower taxes, larger subsidies and direct increase in expenditure due to the pandemic.
"To stay in the game, the end game should not be merely on beefing up coffers, but a complete overhaul in restructuring mindsets, methodological planning on what is next in the horizon.
"Covid-19 has changed the way we work, and given Malaysia a huge headstart over others. The question now is, are we able to monetise this in a more efficient and effective manner?" he asked.
Malaysia, he said, had seen five years of digital transformation taking shape in merely one year.
"We are ahead of the curve. Many don't realise it and that is the major worry," he added.
According to Facebook and Bain & Company's recent study, Malaysia has the highest percentage of digital consumers with 83 per cent of its population of those aged 15 and above.
Some 48 per cent of them switched to purchasing mostly online in the past year.
"We are one of the nations which is best prepared for the on going fourth industrial revolution at the moment, but to effectively," said Tee, who has vast experience in corporate restructuring and reverse takeover of financially-troubled companies, having served previously as a special administrator to Danaharta.
UHY, established in 1986 and based in London, is a network of independent accounting and consulting firms with offices in nearly 296 major business centres in 89 countries.