Page 10 - KLSCCCI Nov 2021 - eBulletin 401

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Inheritance Tax KLSCCCI also believes that inheritance tax
will cause similar negative effects due to
the following:

Double taxation Discourage savings for investments Ineffective and
It is a form of double taxation as Inheritance tax increases consumerism and narrow tax base
the money a person earned is where taxpayers are encouraged to spend Experts acknowledge
taxed twice. Any legitimately more in their lifetime and amass less in response inheritance tax as
earned income or capital to the higher tax rate. This discourages the generally ineffective
appreciation will have been accumulation of capital which is a pre-requisite and narrow-based.
taxed as its being made during for the successful growth of small and medium Such tax revenue
a person’s lifetime. As a result, enterprises (SME) as well as leading to higher tends to decrease
an individual’s estate comprise inflation. The entrepreneurial drive to create over time as wealth
assets that have already been assets and capital will be dampened, would be channeled
taxed. This will not constitute a hampering long-term economic growth. It is away to a jurisdiction
‘fair’ tax and will not sit also pertinent to note that successful countries without inheritance
comfortably with individuals in such as Singapore and Australia do not tax.
general. implement inheritance tax.

Suggestion

Arising from the above, KLSCCCI urge the government to focus its attention in making our existing tax regime to be
more efficient and fairer to all parties. These can be achieved in the following manner:
Reinstate the GST regime Expand & extend Real Property
Given GST has demonstrated effective outcome in Gains Tax (RPGT) exemption
other countries to be fairer and more efficient than the The government has given an exemption of RPGT for
current SST regime. Again, countries like Singapore the disposal of residential properties by individuals
and Australia have been successful in implementing until 31 December 2021. We would propose for this
GST in its tax regime. exemption to be expanded to cover any forms of
real properties (not just limited to residential
Improve efficiency & effectiveness properties) and extended for another year to 31
in government fiscal efforts December 2022. As the government is aware, many
businesses have been badly affected by the
More efforts to be focused on improving efficiency & pandemic with many individual business owners
productivity of government expenditure and prioritise having exhausted their savings and are desperately
high-multiplier projects to avoid waste. looking to raise more cash by disposing properties
and investments to ensure business survival. This will
Lower interest rates on credit card debt help businesses to stay afloat, avoid more
retrenchments and provide businesses better
Lowering the interest rates on credit card debt will chance to recover quickly. We believe, with more
provide greater relief for business owners and general businesses surviving the pandemic, this will lead to
consumers managing short term credit crunch in faster recovery of job market and tax revenue for the
dealing with the pandemic. government in the longer term.

Continued Support

We believe that our suggestions above offer some solutions to our current problems that will encourage
productive entrepreneurship and long-term investments. We trust that the government will consider our suggestions as
well as diligently and thoroughly study the full effects and feasibility of implementing new tax revenue streams. KLSCCCI
would like to literate that it is supportive of the government’s efforts to improve its tax revenue and offers participation
in any future discussion forums in helping to arrive at the most optimal solution.

10 (Source: Finance and Capital Market Committee (FCM) of KLSCCCI)