Why postpone 10% tax on online goods, says economist

The postponement would add to the list of confusing economic policies with ad-hoc changes, according to Geoffrey Williams.

PETALING JAYA: An economist has called for an explanation on the sudden postponement by the Customs of a proposed 10% tax on low-value goods that was to come into effect on April 1.

The economist, Geoffrey Williams of the Malaysia University of Science and Technology, said the postponement left the impression that economic policies were not well thought through.

“We have no clear explanation for this postponement,” he told FMT. “While the postponement will have a marginal impact on the government’s revenue, it needs to be explained.”

Williams said there seemed to be increasing confusion where economic policies were concerned as ad hoc changes were being poorly communicated.

He cited the postponement of the implementation of the minimum wage for companies with fewer than five employees from Jan 1 to July, as well as the proposed tax on luxury goods.

The 10% tax on low-value goods was mooted by former finance minister Tengku Zafrul Aziz when he tabled the 2022 budget. He said the tax would level the playing field for locally manufactured goods.

Federation of Malaysian Consumers Associations secretary-general Paul Selva Raj said the postponement led to uncertainty and that many quarters would be left hanging.

“It would now affect business operations. How do you expect them to make any solid plans?” he said.

Source: Why postpone 10% tax on online goods, says economist – FMT

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