THE 2015 Budget will see a major shift of taxation from the tax on income to tax on consumption, that is, Goods and Services Tax (GST) which will be implemented on April 1 next year. The proposed GST rate is six per cent.
It is envisaged that, inevitably, there will be an increase in the prices of goods, especially with certain businesses taking advantage of this opportunity to increase prices which must be checked.
To alleviate the financial burden on the poor and the medium- and low-income groups, I wish to propose that the range of goods which is zero-rated (tax exempt) be widened, especially in the food, education and health sectors, so that the impact on these groups will not be so great.
In view of the huge increase in revenue for the Customs Department, the internal audit section of the department must be beefed up to prevent leakages.
With the increase in revenue from GST, it is proposed that the income tax rates be reduced so that the financial impact on the rakyat would not be so great.
Personal tax relief should also be increased. For example the personal tax relief of a child is only RM1,000 which has remained unchanged for over 20 years. This should be increased to at least RM5,000. The relief for wife is only RM3,000, it should be increased.
To meet the demand for skilled manpower, it is proposed that more private vocational and skills training institutions be set up, following the examples of South Korea and Germany, with the help of tax incentives.
To encourage listed companies to be actively engaged in charitable and welfare activities, it is proposed that they be given double deduction on expenses incurred from such activities. The treasury should provide a list of activities and organisations entitled to such tax deduction.
Tan Sri Lee Lam Thye, Kuala Lumpur