KUALA LUMPUR: Malaysia needs tax reforms to raise additional revenues for reducing inequality, according to the World Bank.
Its latest report titled A Fresh Take on Reducing Inequality and Enhancing Mobility in Malaysia stated that the country needs to raise more revenues through both direct and indirect taxes.
“Malaysia’s public revenues not only lag the revenues of upper middle-income countries and high income peers but also the low middle income average. The biggest consequence of low revenues is to limit what the country can spend,” the report said.
“International data suggest that there is a relatively fixed cost of running a government, with total spending apart from that on health, education and social protection being relatively fixed as a percentage of gross domestic product across all income levels. “This means that as new revenues are raised, fiscal space is created for greater social spending,” it said. –– Bernama
