TITLE : TAX ISSUES: A REVIEW AND DISCUSSION OF TAX POLICY.

Taxation is not an end in itself. It is only a means to an end. Taxation is a'fiscal tool for economic development and tax policy, therefore, is an important subject. Most developing countries face very important issues in tax policy. Malaysia is no exception. Tax reform is always a continuing exercise. This is so primarily because the economic environment changes and tax policy must be changed to meet new demands and also take up positions aimed at new directions in economic development. Thus, tax policy is never decided in a vacuum. Malaysia itself is at a cross-road: there is an urgent need to drastically drop the corporate tax rate so as to act as a catalyst for economic recovery. There has been a noticeable change in the tax policy over the last two years, that is, there has been a shift frdm direct taxation to indirect taxation. The question now posed is, whether the Government would drop the corporate tax rate and to compensate such loss introduce value added tax (VAT).

The points made in this book are not meant to be exhaustive. It is intended only to increase an awareness among the general public of the significance of the various aspects of the tax system and how we could modify the system to sustain the economic recovery of 1988.

This book is based on articles published in The Star. I am grateful to Mr Harpal S Dhillon for his comments in respect of indirect laxation. Ms Mildred Lopez (I.C.S.A.), FIRM (Tax Services) Sdn Bhd, helped with the proof reading of this book.

I am also indebted to my wife, Jean, without whose support and understanding this book and other books of mine would never have been written.

8th August 1988 Arjunan Subramaniam