What taxes could help Malaysia manage its national debt?

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Potential Tax Measures to Address Malaysia's National Debt

Introducing or increasing specific taxes, coupled with prudent investment, could offer a viable strategy for Malaysia to manage its high national debt. Nobel laureate economist Professor Joseph E. Stiglitz has suggested that certain tax adjustments can not only generate revenue but also improve the overall performance of the economy. These measures aim to shift the tax burden away from productive activities and towards less desirable economic behaviours.
Carbon Tax on Pollution

A key recommendation put forth by Professor Stiglitz is the implementation of a carbon tax. This approach prioritises taxing negative externalities, such as pollution, rather than taxing positive economic activities like work or savings. By disincentivising environmentally damaging practices, a carbon tax can generate revenue while simultaneously encouraging more sustainable economic behaviour.
Property Tax to Curb Speculation

Professor Stiglitz also mooted the introduction or enhancement of property taxes as a means to discourage property speculation. Such a tax would target individuals or entities engaging in real estate speculation, aiming to redirect capital and investment towards more productive sectors of the economy. This measure is intended to foster innovation and new enterprises rather than promoting rent-seeking behaviour.
Capital Gains Tax for High-Income Earners

Furthermore, the economist suggested implementing a capital gains tax. This tax would specifically target the profits derived from the appreciation of assets, which often represent a significant portion of income for high-income groups. While Malaysia currently taxes profits from property sales, it does not have a general capital gains tax. Implementing such a tax could provide a substantial revenue stream and address income inequality.
Economic Benefits of Suggested Taxes

The taxes suggested by Professor Stiglitz are posited to not only raise substantial revenue but also to enhance the economy's performance. By discouraging speculation and rent-seeking, these measures are expected to encourage innovation and the development of new enterprises. This contrasts with austerity measures, such as those imposed on Greece, which led to a decrease in GDP and an increase in the debt-to-GDP ratio, highlighting the potential benefits of a revenue-generating and economically stimulating tax strategy.

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What taxes could help Malaysia manage its national debt?

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