LETTER: As the country emerges from the Movement Control Order, the financial realities are beginning to sink in and be felt across the country. The effects of this will touch everyone.
I believe the most important question on everybody's mind will be the future economic impact on all of us, be it on employment, inflation or the government's coffers.
As most Malaysians have been staying home, businesses and economic activities have been disrupted, and this impacts future growth and employment. The government's RM250 billion stimulus package has been a relief to many, but for how long?
Global growth is not looking optimistic for the immediate term and this affects us as we are a trading nation. Some industries might take six to 12 months to recover, others might need 24 months or more.
Allowing Employees Provident Fund withdrawals might offer some small relief, but I believe the government can be most effective in helping out the masses in another way: taxation.
The government should throw businesses a lifeline by wielding the tax carrot. It is now the tax reporting period and the most apt time to make this suggestion.
To encourage businesses not to retrench their staff, the government should offer a tax waiver or exemption for 2019, 2018 or even 2017. This will encourage them to use their savings to keep their business moving and maintain staff.
Refine and tie in the mechanism to make it an attractive carrot for the private sector to keep their staff.
Those who have paid their taxes for the past years should be given tax credits for the years ahead, maybe spread across five years.
Businesses need to dip into their reserves, more so now than ever before, because it will be needed to jumpstart their economic activities and, more importantly, keep their workers on the payroll to ensure everyone can feed their families.
For the year 2020, tax breaks and reductions should be offered to stimulate the economy for the rest of the year and beyond.
There can be high tax percentages in Inland Revenue Board brochures, but what good is that when economic activities are not chugging along to be taxed?
This might put pressure on the government's revenue for next year, but the fact of the matter is plain — the government can fork out billions in cash now to stimulate the economy or work with the private sector to drive economic activities and consumption.
This will allow the economy to recover gradually into next year and bring the coauntry's economic activities back to pre-pandemic levels. By then, economic activities that will be taxed next year will at least cover some of the billions which would have been otherwise dished out as cash aid now.
Revisiting the imposition of the Goods and Services Tax might not be suitable at present.
Is my suggestion groundbreaking? Not at all. Local authorities and enforcement agencies offer discounts regularly. Mind you, those are for offenders.
Tax paying businesses and individuals are law abiding entities and citizens who have been at the frontline for our country all this while. Giving them a break should bring a positive outcome.
Unemployment and inflation are political minefields for any government. Tax breaks, tax forgiveness, tax holidays or tax credits will certainly go a long way to cushion the impact of Covid-19, put minds at ease or even a smile here and there.
Isn't it logical to think that good perception and confidence in the country's economic prospect is most needed, and moves that help them should be encouraged?
JIMMY L
PETALING JAYA, SELANGOR
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times