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Malaysia trails Singapore, Thailand in tax collection efficiency



Malaysia ranks as one of Southeast Asia’s lowest tax collectors, with a tax-to-GDP ratio of just 11.8%, lagging behind neighbours like Singapore and Thailand. The country’s reliance on the Sales and Services Tax (SST) rather than the Goods and Services Tax (GST) has led to a decrease in tax revenue, from MYR40bn (USD8.37bn) under GST to less than MYR30bn with SST. Experts from Malaysia University Science and Technology and PwC Malaysia suggest that expanding the tax base and increasing the SST rate to 8% from 6% could boost revenues. They advocate for including services such as health, education, and rented commercial property in the taxable bracket to enhance Malaysia’s tax system efficiency and increase its revenue to MYR307.6bn in 2024.

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