Now Reading
Should The Rich Pay More Tax And Be Denied Government Subsidies?

Should The Rich Pay More Tax And Be Denied Government Subsidies?

LHDN announced that 85% of personal income tax collections in 2022 came from the T20.

Subscribe to our Telegram channel or follow us on the Lumi News app for the latest stories and updates.

The debate on whether the rich should pay more taxes and be denied government subsidies has been discussed for many years.

Some argue that the wealthy should contribute more to society, while others believe everyone should pay an equal share.

Prime Minister Datuk Seri Anwar Ibrahim recently announced that the high-income group, or T20, will no longer receive the government’s subsidy regarding electricity tariffs and Hajj.

Only domestic users who use excess electricity will be charged the current electricity tariff and not given subsidies.

Anwar said the T20 should also bear the full cost of Hajj because they can afford it.

Should The Rich Pay Higher Taxes?

One of the main arguments for the rich paying more taxes is their greater ability to pay.

The wealthy have higher incomes and more assets than the average person, so they can afford to contribute more to society.

Additionally, the rich benefit more from government-funded infrastructure, education, and healthcare programs.

It is only fair that they pay their fair share in taxes to support these programs.

Another opinion is that the rich have a greater responsibility to society.

They have benefited from society’s opportunities and resources, so they should give back to it.

By paying more taxes, the rich can help reduce income inequality and provide more opportunities for those who are less fortunate.

Burdening Honest Taxpayers Further Is Unfair And Undesirable

Opponents argue that everyone should pay an equal share of taxes, regardless of income or wealth.

They argue that the rich already pay significant taxes and that increasing their tax rates would discourage investment and entrepreneurship.

Another argument is that denying government subsidies to the rich would be counterproductive.

Many wealthy individuals and corporations use government subsidies to fund research and development, create jobs, and stimulate economic growth.

Denying these subsidies could harm the economy and lead to job losses.

At the same time, how do we define the super-rich?

For T20 at the lowest tier, the income is RM13,000, significantly lesser than someone earning an RM40,000 salary.

T20 Taxpayers Contribute Lion’s Share Of Personal Income Tax In Malaysia

The public needs to understand where the taxes come from, going to and how they contribute to the country’s overall revenue.

The Inland Revenue Board (LHDN) recently announced that the T20 contributed a significant portion of personal income tax in 2022 and that corporate tax comprised a large percentage of overall tax revenue.

In 2022, T20 taxpayers contributed 85% of personal income tax, a substantial amount.

Additionally, corporate tax made up 55% of overall tax revenue in 2022, indicating the importance of businesses in contributing to the country’s revenue.

It’s also good to hear that LHDN is on track to hit its tax collection target for 2023 and that there are plans to reduce taxes for M40 while increasing taxes for some T20 taxpayers.

It’s also worth noting that the government has plans to reduce taxes for M40 taxpayers, which will benefit 2.4 million people.

This is part of the Budget 2023 plan, including increasing taxes for 150,000 T20 taxpayers.

These changes aim to ensure that the tax system is more equitable and that those who can afford to pay more do so while those struggling financially receive some relief.

Killing The Goose That Lays The Golden Eggs

The debate on whether the rich should pay more taxes and be denied government subsidies is complex.

Finding the right balance is crucial regarding taxation and government subsidies.

Lest we forget, the total tax revenue in 2022 was RM174.5 billion, while the budget for 2023 is around RM388 billion, representing a shortfall of 55%.

Even for 2023, the expected total tax collection of RM176 billion, a record, is still insufficient.

The government should not choke, strangle, and kill off the T20 group to the point they cannot pay more taxes.

Policymakers need to weigh the benefits and drawbacks of different approaches and consider the potential consequences of their decisions.

Ultimately, the goal should be to create a fair and equitable tax system that supports economic growth and benefits all members of society, regardless of their income or wealth.

It is up to policymakers to strike a balance between these two views.

They must consider the potential economic impacts of raising taxes on the rich and denying them government subsidies while ensuring everyone pays their fair share.

Share your thoughts with us via TRP’s FacebookTwitter, and Instagram.

Get more stories like this to your inbox by signing up for our newsletter.

© 2024 The Rakyat Post. All Rights Reserved. Owned by 3rd Wave Media Sdn Bhd