Malaysia Should Revamp GST, Says IMF
Malaysia should increase its goods and services tax (GST) rate, strengthen international anti-avoidance rules, and seek to boost compliance, the International Monetary Fund (IMF) has said.
The IMF said that increasing the current six percent rate of GST by 0.5 percentage points would increase Malaysia’s revenues by an estimated 0.25 percent of GDP.
It added that Malaysian authorities could further improve the GST system by reducing the number of exempt and zero-rated items.
The country should also “enhance the effectiveness of investment tax incentives,” the IMF said.
In its 2017 Budget, Malaysia announced the introduction of a new corporate income tax, aimed at enhancing tax efficiency and improving conditions for small and medium enterprises. It also introduced additional personal income tax relief.