Tax and revenue trends and implications in Malaysia

Tax and revenue trends and implications in Malaysia. Business and Management Quarterly Review, 8 (2): 1. pp. 1-14. ISSN 2180-2777 (2017)


This paper aims to fill the gap in the existing literature related to tax reform in Malaysia. The study focuses through two major perspectives. First, we discuss the tax reforms in selected Asian countries like India, China, Thailand and Indonesia. Second, we examine the trend of tax revenues and forecast their amount for 5 years onwards. For analysis, we apply a linear trend line to calculate the least square fit. From the findings, the study proves that majority of taxes show an increasing trend. Besides that, the forecasting of tax revenues also shows that there are some improvements between 2014 and 2018; except for the case of import duties. These findings have profound implications for Malaysia tax system. Our calculations suggest that the sales tax revenue could improve between 2014 and 2018 but it would be slower than the other taxes. Hence, with the introduction of the GST by the Malaysian government, it is hoped that this consumption tax (i.e. GST) would bring more benefit to the country. In addition, the findings are supported by the Laffer curve theory and the curve can be applied for both direct and indirect taxes in Malaysia. Therefore, the government should set the rate below the optimal level to maximise its revenue

Item Type: Article
Keywords: Tax reform, Tax revenue, Taxation, Trend line, Forecast, Malaysia
Taxonomy: By Subject > Business & Management > Finance
Local Content Hub: Subjects > Business & Management
Depositing User: Mohd Fadhli Samsudin
Date Deposited: 23 Mar 2022 04:25
Last Modified: 23 Mar 2022 04:25
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