KUALA LUMPUR, Nov 1 – Barisan Nasional (BN) has outlined a slew of initiatives titled ‘Inisiatif Ekonomi Rakyat’ (People’s Economy Initiative) which can be used by the government as a reference point when it tables the 2019 Budget on Friday.
Khairy Jamaluddin, who is the opposition’ shadow finance minister, said the initiatives could boost the country’s total revenue to RM247 billion in 2019.
Khairy said among the initiatives include bringing back the Goods and Services Tax (GST), albeit at a much lower rate of three per cent compared to the six per cent imposed during the BN administration.
The lower-rated GST was among nine new taxes suggested by BN to increase government revenue.
“BN suggests that the GST is reintroduced at a rate of three per cent.
“The GST is a more transparent and efficient tax and can be reintroduced at a lower rate, with even more items on the exemption list.
“The tax collection is expected to be the same as that of the current Sales and Services Tax (SST),” he said while tabling BN’s alternative budget in Parliament on Thursday.
The initiative carries the theme, ‘Merancakkan Pembangunan, Meningkatkan Pengagihan, Kalis Masa Depan’ (Spurring Development, Increasing Distribution, Future-Proofing).
Khairy, who is also Rembau member of parliament, said the tabling of the initiative is not meant to show that the document is superior to the official budget, but done in the hopes that the ideas can be used by the government.
In the tabling, Khairy also suggested that the government introduce as Soda Tax at a rate of RM0.25 per litre, as well as a Carbon Tax with a rate of RM10 per metric tonne for factories which produce at least 25,000 metric tonnes of greenhouse gases.
To diversify as well as increase government revenue, he suggested that a Plastic Bag Tax is imposed at RM0.15 which can generate RM12.46 billion in returns for the government.
Khairy said a Capital Gains Tax can also be introduced for individuals whose annual accumulated assets (via either salary, allowances, property or investment profits) exceed RM10 million.
“BN also proposed that a Tobin Tax is imposed on short-term stock transactions.
“This can control speculation which could lead to the risk of uncertainty in the stock market,” he said.