MARC doesn’t expect broad-based tax cuts for individuals, corporations

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KUALA LUMPUR: Malaysian Rating Corporation Bhd (MARC) does not anticipate a broad-based cut on taxes for individuals and corporations in the 2012 Budget on Friday.

However, the personal income tax rates for the middle-income group could be reduced to help offset the rising cost of living, it said, noting that the middle-income group had not benefited considerably from existing government measures that focus on the low-income segment.

In its pre-budget special commentary yesterday, the rating agency also expected the government to lay out definitive timeframe for the implementation of the Goods and Services Tax (GST) to ensure that businesses are sufficiently prepped up for the tax.

“Indeed, clearer guidance on this would earn the government confidence from investors and, to some extent, international rating agencies as it would demonstrate the government’s unwavering commitment to more disciplined financial management,” it said.

MARC also said promoting debit cards as opposed to credit cards could be the right step to reduce household debts. “Perhaps, the government could grant tax benefits to debit card users whenever they make purchases,” it said.

Meanwhile, it said that for government servants working in areas with high cost of living, increasing the housing allowance could be sensible as the last revision took place in the 2005 Budget. — Bernama