Malaysia Sales Tax Plan 2013

Malaysia Sales Tax Plan 2013-Malaysia’s economy and financial markets

Malaysia plans to impose sales tax by 2015

Malaysia hopes to impose a goods and services tax by 2015 to boost revenue and curb

The announcement comes as Malaysia’s economy and financial markets come under pressure amid rising domestic debt, a swollen fiscal deficit and a shrinking current account surplus. 

The central bank recently cut the country’s growth forecast this year to 4.5-5 per cent, while Fitch Ratings downgraded Malaysia’s credit rating outlook to negative from stable, citing a lack of fiscal reforms.

Mr. Irwan said the new tax could be announced by Prime Minister Najib Razak when he unveils the 2014 federal budget in October, but it will take 14 months before it can be implemented. 

He said the tax plan will encompass a “total package” that includes reforms in corporate and income tax but declined to give details.

The GST is expected to replace the current narrowly applied 10 per cent sales tax and five per cent services tax. The GST will be levied on transactions at all stages of production of goods and services. Malaysia’s current sales and services taxes are single-stage taxes applicable to selected goods and services.