Raise property stamp duties to increase revenue, says economist

Stamp duties on all property transactions should be without any threshold limits or exemptions if the government wants to increase revenue. (Bernama pic)

KUALA LUMPUR: Economists agree with a move to widen the tax base by introducing additional taxes in the upcoming 2019 Budget and to sell assets to increase national revenue without burdening the people.

They said the government should also look at increasing existing tax rates to obtain the revenue needed to pay off the nation’s debts.

Maybank Kim Eng senior economist Chua Hak Bin suggested that property stamp duties on both local and foreign buyers should be raised.

He proposed that stamp duties on all property transactions to be without any threshold limits or exemptions as this would increase the duties collected and contribute to an increase in revenue collection.

Chua was one of the panellists at a discussion session titled “Opportunities and Challenges for the New Malaysia” at the “Malaysia: A New Dawn” investors’ conference here today

He said the stamp duty, presently between 3.0% and 3.5%, was relatively low compared with other countries in the region, such as Singapore, where the stamp duty is three times that of Malaysia’s.

“I think stamp duty is more functional. If you want to impose capital gains tax on stocks it would be a bad idea.

“The money investments will shift to the other jurisdictions that don’t have capital gains tax,” he said, adding that the revenue collected could be used to support social infrastructure.

Meanwhile, Asian Development Bank principal economist Bernard Ng said the government could possibly impose a new tax on fossil fuel or implement a carbon tax.

He said this would assist the country to achieve its pledge made in Copenhagen in 2016 of cutting carbon emissions by 45% by 2030.

RHB Research Institute Sdn Bhd vice-president and head of economics research Peck Boon Soon said a tax on equity and inheritance assets should not be an option.

“These new taxes, if implemented, will be quite negative for Malaysia in the longer term as it will affect people’s mindset of Malaysia as an investment destination,” he said.