Latest news with #taxreform
Free Malaysia Today
3 hours ago
- Business
- Free Malaysia Today
Expediting reforms will make tax hikes easier to swallow, govt told
World Bank's lead economist for Malaysia, Apurva Sanghi, said reducing spending would not be easy as most of it involved 'rigid' costs such as wages, pensions and debt service. PETALING JAYA : The World Bank's lead economist for Malaysia, Apurva Sanghi, says expediting reforms – such as enacting a government procurement law – will make the public less hostile towards tax hikes. In a post on X on the expansion of the sales and service tax, Apurva pointed out that the auditor-general regularly uncovered losses in public funds, irregular payments and wastages across various ministries. While some reforms have been carried out, a specific law to oversee government procurement has been delayed, he said. Apurva said reforms would build public trust, which in turn would make it 'easier to swallow bitter tax hikes'. 'Tax hikes are painful but people can bear them, if they're meaningful. 'This means faster progress, especially on governance reforms and that would increase trust.' Apurva said trust was the ultimate currency for any government. On comparisons made between the SST and the goods and services tax, Apurva said that while both were regressive, it could be made progressive via targeted cash transfers and exemptions. 'The current SST expansion does include progressive elements.' On June 9, the finance ministry announced that a 5% to 10% rate would be imposed on non-essential goods from July 1, although basic necessities would not be taxed. The announcement has triggered brickbats. Apurva also responded to those questioning the government's decision to raise taxes instead of reducing spending. He said while it was a fair question, the country needed to spend more, which meant it needed to raise more revenue. The finance ministry previously said that the SST collection is expected to increase by RM5 billion in 2025 and by RM10 billion in 2026, following the expansion of its scope. Apurva noted that both revenue and spending had dropped by 30% since 2012, which was well below those of global peers. 'Spending needs are only growing, especially as Malaysia ages,' he said, adding that reducing spending would not be easy as most of it involved 'rigid' costs such as wages, pensions and debt service which accounted for 57% of operation expenditure.
Bloomberg
4 hours ago
- Business
- Bloomberg
Senate Unveils New Trump Tax Draft With Plans to Vote Soon
Senate Republicans unveiled a new version of their $4.2 trillion tax and spending package, moving closer to a vote as they near a July 4 deadline set by President Donald Trump. The new draft reflects compromises among warring factions of the Senate GOP which has been divided over how much to cut safety-net programs such as Medicaid and how rapidly to phase out of renewable energy tax credits enacted under the Biden administration.
Free Malaysia Today
4 hours ago
- Business
- Free Malaysia Today
75% of small firms exempted from new SST, says trade group
William Ng, president of Samenta, said the association was among the first to raise concerns over the potential impact of the revised sales and service tax. PETALING JAYA : About 75% of small and medium-sized enterprises will be exempted from the additional 8% levy in the revised and expanded sales and service tax (SST) that comes into force on July 1, says a business group. The Small and Medium Enterprises Association Malaysia (Samenta) said a revision to the expanded tax regime announced today effectively exempts about 75% of SMEs from the additional 8% levy. Samenta president William Ng said the association was among the first to voice concerns over the potential impact on small businesses from the expansion of the sales and service tax scheme, Bernama reported. The association said it would not seek further concessions from the government. Ng thanked Prime Minister Anwar Ibrahim for taking note of their concerns and revising the threshold. 'While we will continue to advocate for a balanced and SME-friendly approach in future tax reforms, we consider this matter concluded and will not seek further concessions on the SST expansion,' he was quoted as saying. Earlier today, the finance ministry said the threshold for service tax registration for leasing or rental and financial services had been raised from RM500,000 to RM1 million, to reduce the number of small businesses that would be affected. Ng said the revision effectively exempts about 75% of SMEs from the additional 8% levy under the expanded tax regime. He encouraged the remaining 25% of small businesses to take steps to implement the new rates. Last month, the finance ministry said a 5% to 10% rate would be imposed on non-essential goods from July 1, while the service tax was expanded to include rent, lease, construction, financial services, private healthcare and education. Initially, an 8% service tax rate was to be charged for these services with a registration threshold of RM500,000. With the new revision however, businesses with sales exceeding RM1 million will be required to pay service tax on rental services.
Bloomberg
7 hours ago
- Business
- Bloomberg
GOP Reaches Tentative SALT Deal at $40K Cap
"Balance of Power: Late Edition" focuses on the intersection of politics and global business. On today's show, Representative Mike Lawler (R) NY shares his thoughts on tentatively reaching a deal on SALT with his Republican colleagues in the Senate. Elizabeth Wydra, President of the Constitutional Accountability Center, & Rep. Sam Liccardo discuss the US Supreme Court's rulings and the impact of these rulings. PWC National Tax Office Co-Leader Rohit Kumar talks about what to expect from the US Senate as the self-imposted Tax Bill deadline is July 4th. (Source: Bloomberg)
Yahoo
8 hours ago
- Business
- Yahoo
A Big Win: Rep. Lawler on Tentative SALT Deal Reached
Representative Mike Lawler (R) NY shares his thoughts on tentatively reaching a deal on SALT with his Republican colleagues in the Senate. Rep. Lawler talks about how this deal could benefit additional states outside of New York, New Jersey, and California & the potential hurdle the House is facing as the self-imposed tax bill deadline looms. Representative Lawler speaks with Kailey Leinz and Joe Mathieu on the late edition of Bloomberg's "Balance of Power."
