Malaysia ranks among Southeast Asia’s lowest tax collectors, with a tax-to-Gross Domestic Product (GDP) ratio at 11.8 percent. Prof Emeritus Dr. Barjoyai Bardai from Universiti Sains dan Teknologi Malaysia notes Malaysia’s lag behind Singapore and Thailand, which employ the Goods and Services Tax (GST) system.
Malaysia lags in tax collection
Our country’s tax collection lags mainly due to its reliance on the Sales and Service Tax (SST), yielding less than RM30 billion compared to RM40 billion under GST. Raja Kumaran, PwC’s Indirect Tax Leader, suggests expanding the tax system to include services like healthcare and education to boost revenue, vital for Malaysia’s economic growth.
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