Malaysia must raise wages before expanding tax base, says Akmal

Contributing sentiments towards policy:

69% : It said reintroducing a broad-based consumption tax, such as the goods and services tax (GST), would provide a more stable revenue base while aligning Malaysia's tax system with international best practices.
66% : Player Insights Video- Viewport / Frames- Audio- Buffer Video / Audio- Time- Stream- Player version- Bitmovin PlayerAdaptive Streaming for the WebPlayer: 8.269.0UI: 4.17.0 Show Player Insights Copy link at current time Video Qualityauto Speednormal Audio Track- Audio Qualityauto Subtitlesoff (0) BackReset Font sizedefault Font styledefault Font familydefault Font colordefault Font opacitydefault Character edgedefault Character edge colordefault Background colordefault Background opacitydefault Window colordefault Window opacitydefault "Tax expansion is linked to wages because salaries need to be sufficient for people to pay income tax," he said.
60% : This follows the Organisation for Economic Co-operation and Development's (OECD) recommendation that Malaysia consider reintroducing a broad-based consumption tax as part of wider tax reforms to strengthen government revenue.
59% : The report also recommended broadening the personal income tax base by streamlining deductions, limiting exemptions and taxing a wider range of capital income, while strengthening tax administration.
57% : "While we respect the views from the OECD, what is more important is how we broaden our tax income.
57% : The report said higher subsidy spending following the conflict in the Middle East had reinforced the need for broader tax reforms, noting that tax revenue, at below 13 per cent of GDP, remained low by international standards.
53% : Akmal said the government continued to assess more efficient taxation methods, but any future measures must not hinder economic growth.
53% : OECD director of the Country Studies Branch at the Economics Department Dr Luiz de Mello said the organisation respected Malaysia's decision not to prioritise introducing a value-added tax (VAT) at this stage.
52% : "Without higher pay or better wages, any tax introduced may have repercussions on what people consume or what people earn," he said in a press conference at the launch of OECD Economic Surveys: Malaysia 2026 here today.
51% : Akmal said income tax currently covers only about 15 per cent of Malaysia's workforce, highlighting the need to raise income levels before broadening the tax base.
47% : The OECD said targeted cash transfers could help protect lower-income households from the impact of such a tax.
42% : He said the government's priority was to address the structural issue of wages and household income, as insufficient income levels had limited the ability of more Malaysians to contribute through income taxes.
40% : PUTRAJAYA: Malaysia must address the structural issue of low wages before expanding its tax base through measures such as reintroducing a broad-based consumption tax, said Economy Minister Akmal Nasrullah Mohd Nasir.

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