Clarity and compassion needed in tax policy

 

By: Datuk Seri Panglima Yong Teck Lee, Sabah Ex CM.

Kota Kinabalu: Recent announcements on new taxes, suspensions and postponements of policies have left Malaysians and business owners, including myself, bewildered.

It is observed that the recently announced sales and service tax (SST) is imposed inconsistently even on the same category of products. For example, local and imported avocados are subject to different rates, creating confusion for both consumers and businesses. 

Meanwhile, tax enforcement actions are pressing forward despite the unclear guidelines and the current weak economic conditions.

Principles of proper tax system

The first essential principle of any proper tax system is that rules must be clear enough for people and businesses to understand their obligations without confusion.

A second foundational requirement is that tax rates be set at levels taxpayers can reasonably afford, especially in a fragile economy where many are already struggling.

A third guiding tenet is that the government’s collection process must be simple and predictable, avoiding enforcement actions that punish those who genuinely wish to comply.

The ongoing shifts in SST rules, e-invoicing deadlines, fuel subsidy adjustments and stamp duty regulations fail to meet these three core standards.

This persistent uncertainty undermines trust, deters investment and deepens the hardship faced by struggling families and small enterprises.

We call on the government to pause further tax changes, engage meaningfully with stakeholders and restore clarity, affordability and ease of collection in order to stabilise the economy and rebuild public confidence.

Meanwhile, the Inland Revenue Board is urged to desist from enforcement on the new taxes until rates and procedures are clarified, taxpayers can afford them and collection is effective rather than punitive, as harsh enforcement risks destroying businesses and livelihoods.