Please change the movie on tax

The debate over sales and services tax (SST) versus the goods and services tax (GST) persists, especially during pre-budget season. Businesses argue that GST is preferable to SST, as they can claim it back, but critics point out that this means the government is essentially taxing more goods and services from more people, ultimately taking more money from the rakyat, particularly the poor.

Former politicians argue for GST as it raises more government revenue, but this is seen as simply taking more money from the rakyat. Tax experts suggest SST should be more like GST for efficiency, but they are only fooling themselves. The writer suggests it's time to move beyond 1970s tax debates and embrace the digital era with an electronic payments tax or EPT.

This tax would be a small charge on all electronic payments, including credit and debit cards, e-money, and online bank payments, while exempting cash transactions. The EPT would replace complex income and consumption taxes, reducing compliance and administrative costs to nearly zero. It would have a broad tax base of around 18.4 billion retail transactions annually, generating substantial revenue with a low tax rate.

The EPT is inherently progressive, benefiting wealthier individuals and large corporations, and is inherently difficult to evade due to automated electronic records. This tax would provide the government with fiscal stability and predictability, with funds collected instantly with each transaction. The writer urges a departure from old tax methods and adoption of this modern, efficient solution.